N6591
PAPUA NEW GUINEA 
   IN THE NATIONAL COURT OF JUSTICE 

WS 769 of 2015 

BETWEEN: 
MT KARE HEAD TRUSTEECO LIMITED
    Plaintiff 

	AND:	
STAN NEKITAL as the Registrar of Tenement 
	First Defendant	

AND:
ANDREW GOIYE as the Chief Mining Warden
Second Defendant

AND:
PHILIP SAMAR as the Managing Director
 of Mineral Resources Authority
Third Defendant

AND:
ROBIN MOAINA as the Chairman of 
Mining Advisory Board
Fourth Defendant

AND:
BYRON CHAN as the Minister for Mining
Fifth Defendant

AND:
THE INDEPENDENT STATE OF 
PAPUA NEW GUINEA
Sixth Defendant

AND:
SUMMIT DEVELOPMENT LIMITED
Seventh Defendant

Waigani: Hartshorn J 
      2016: 4th February 
	                   : 30th November 

Application to dismiss proceeding 

Cases: 
Bougainville Copper v. Commissioner General (2008) N3331
Kerry Lerro v. Stagg & Ors (2006) N3050
Kiee Toap v. The State (2004) N2731, N2766
Mills v. Cooper [1967] 2 QB 459 
Mt Hagen Urban Local Level Government v. Sek No. 15 (2009) SC1007
Ronny Wabia v. BP Exploration Operating Co Ltd [1998] PNGLR 8
Santos v. Delhi Petroleum [2002] SASC 272 
Simon Ekanda v. Rendle Rimua (2015) N6174 
Siu v. Wasime Land Group Incorporated (2011) SC1107
Tampion v. Anderson [1973] VR 321 
Takori v.Yagari & Ors (2008) SC905 

Counsel:
Mr. C. Gagma, for the Plaintiff
Ms. D. Aikung-Hombhanje, for the First to Fourth Defendants
Mr. E. Bua, for the Fifth and Sixth Defendants
Ms. G. Kogora, for the Seventh Defendant

30th November 2016

1.     HARTSHORN J: This is a decision on a contested application to dismiss this proceeding. The application to dismiss is made by the seventh defendant, Summit Development Limited (Summit) and is supported by the other defendants. Summit seeks to dismiss this proceeding on the grounds that no cause of action is disclosed and that the proceeding is frivolous and vexatious. Reliance is placed upon Order 12 Rule 40 (a) and (b) National Court Rules.

2.    Summit is the registered proprietor of mining tenement Exploration Licence 1093 (EL 1093) located at Mt. Kare, Enga Province. The plaintiff, Mt. Kare Head Trusteeco Limited (MKHT) claims to be an umbrella or holding company of landowners of Mt. Kare.

Background

3.    MKHT commenced this proceeding seeking amongst others declaratory relief and damages. MKHT also sought orders that it be issued a permanent caveat over EL 1093, that the s. 129 Notice is defective and has no effect, and that MKHT be issued a permanent caveat over EL 1093. Following an earlier hearing, this court dismissed MKHT’s claim relating to the caveat.
Preliminary

4.    During submissions, it was submitted on behalf of MKHT that Summit was estopped from moving this application. I will consider this issue first. The reason submitted for the purported estoppel was that a similar dismissal application was moved, heard and deliberated on earlier.

5.    In opposition, it was submitted that the previous application to dismiss was made by the first to fourth defendants are not the seventh defendant, and so the seventh defendant is not so estopped. The court was not assisted with other submissions on this estoppel point.

6.    In Bougainville Copper v. Commissioner General (2008) N3331 and Simon Ekanda v. Rendle Rimua (2015) N6174, I considered the principle of issue estoppel and reproduced the following statement of Diplock L.J. in Mills v. Cooper [1967] 2 QB 459 at pp 468-469:

“That doctrine, so far as it affects civil proceedings, may be stated thus: a party to civil proceedings is not entitled to make, as against the other party, an assertion, whether of fact or of the legal consequences of facts, the correctness of which is an essential element in his cause of action or defence, if the same assertion was an essential element in his previous cause of action or defence in previous civil proceedings between the same parties or their predecessors in title and was found by a court of competent jurisdiction in such previous civil proceedings to be incorrect, unless further material which is relevant to the correctness or incorrectness of the assertion and could not by reasonable diligence have been adduced by that party in the previous proceedings has since become available to him.”

7.    As to the submission that the previous dismissal application was not made by Summit, although that is correct, Summit did support that application. It is the case though that in the previous dismissal application, although part of this proceeding was dismissed - that part concerning MKHT’s claim to a caveat - the remainder of the proceeding (non-caveat part) was not dismissed as there was no evidence relied upon by the first to fourth defendants and I was not satisfied that any deficiencies in the statement of claim could not be remedied by amendment. 

8.    There was not a determination of the correctness of an essential element of MKHT’s cause of action or of the first to fourth defendants defence in regard to the non-caveat part, or in regard to that part, whether a reasonable cause of action was disclosed or whether that part was frivolous, or vexatious or an abuse of process of the court.

9.     Further, the decision on the previous dismissal application in regard to the non-caveat part did not finally decide the issues relating to that part between the parties: Santos v. Delhi Petroleum [2002] SASC 272 at [399] – [400]. Consequently, I am satisfied that Summit is not estopped from moving this application.

This application

10.    Summit submits that this proceeding should be dismissed as:
a)	The statement of claim is on its face confusing and impossible to follow and is therefore vexatious and frivolous;
b)	In regard to MKHT’s claim in the statement of claim to an interest in the tenement at paragraph 45 (a):
ii)	s. 116 Mining Act 1992 provides that any legal or equitable interest in any tenement can only be created in writing. MKHT has not produced any written instrument signed by any registered proprietor giving MKHT any form of interest in EL 1093. In the absence of any such written instrument, MKHT is not able to have any form of interest in the tenement;
ii)	Any written instrument, must be ministerially approved: s. 119(2) Mining Act 1992. There is no evidence of any ministerially approved written instrument existing;
iii)	Even if another entity had transferred its interest to MKHT, any such transfer being a form of instrument must be in writing. There is no evidence of this and no evidence of any such transfer being ministerially approved, or being lodged for approval;
Consequently MKHT does not have any legal or equitable interest in the tenement.
c)	As to MKHT’s claim for compensation – paragraph 45(a) statement of claim:
i)	s. 155 Mining Act 1992 provides for compensation to landholders, not a company;
ii)	The question of who the rightful landholders are is addressed in other proceedings. There is a mediated agreement that has court approval. MKHT is not listed in the mediation agreement and so is not recognised and does not have any right to compensation.
d)	As to MKHT’s claim for damages - paragraph 45(i) statement of claim:
i)	If there is no right to the tenement, and no right to compensation, there is no route for MKHT for damages;
ii)	The substantive parts of the statement of claim are hard to follow. No proper basis of any right to damages has been pleaded and therefore the proceeding should be struck out;
iii)	The first to fourth defendants submit that Summit and MKHT are not parties to the Joint Venture Agreement dated 10th March 1998 and so cannot sue or be sued in respect of it. 
e)	The statement of claim is frivolous and vexatious as MKHT has no interest in the tenement, and therefore does not have a cause of action. Consequently, the proceeding is frivolous and vexatious as it is bound to fail.

11.    MKHT submits that the proceeding should not be dismissed as:
a)	Summit did not file its defence in time;
b)	Summit’s application for an extension of EL 1093 has been refused and so Summit no longer has an interest in the tenement;
c)	MKHT is a trust company for about 70 different clans and the chairman of MKHT is also a landowner;
d)	The removal of MKHT’s caveat does not remove MKHT’s interest in the tenement.

Law

Order 12 Rule 40 National Court Rules

12.    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 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

13.    As to the submission that as Summit’s defence was not filed in time and therefore Summit should not be allowed to move this application, I make no determination as to whether Summit filed its defence in time. If Summit’s defence was not filed in time, that does not preclude Summit from making this application. Summit has filed a notice of intention to defend and so is entitled to take a step in the proceeding: Order 7 Rule 2 National Court Rules. No authority was cited on behalf of MKHT to the contrary.

14.    As to Summit’s application for an extension of EL 1093 purportedly being refused, and therefore Summit no longer having an interest in the tenement, Summit is a defendant in this proceeding and for as long as it remains a party it has an interest in this proceeding. Summit is entitled to continue with this application.

15.    As to MKHT’s claim in paragraph 45(a) of the statement of claim for a declaration that MKHT has a legal or equitable interest or right over the Mt. Kare Gold Mining Project, s. 116 and s. 119(2) Mining Act 1992 are as follows:
“116.	Interest in tenement to be created in writing.
A legal or equitable interest in an existing or future tenement is not capable of being created, assigned, or dealt with, whether directly or indirectly, except by a written instrument signed by the person creating, assigning or otherwise dealing with the interest, or by his duly authorized agent.”
Section 119(2):
“(2)	No—
(a)	legal or equitable interest is created, assigned or otherwise dealt with by an 	instrument, either directly or indirectly; and
(b)	tribute agreement is valid,
	unless and until the instrument has been—
(c)	approved by the Minister under Subsection (4)(a); and
(d)	registered under Subsection (5).”

16.    It is clear from the above sections that any legal or equitable interest in an existing or future tenement is only able to be created by a written instrument that has been approved by the Minister and registered. There is no evidence of any such written instrument so approved and registered and apart from in regard to a caveat, there is no pleading concerning MKHT having such an interest pursuant to a written instrument that has been so approved and registered.

17.    Consequently, I concur with the submissions of Summit that MKHT is not able to succeed with its claim for a declaration that it has a legal or equitable interest or right over the Mt. Kare Gold Mining Project.

18.    As to MKHT’s claim in paragraph 45 (second) (a), (there being two paragraphs 45 (a)), for “A Declaration That the conduct of the Plaintiff in demanding settlement of compensation as landowners over the subject tenement is for all purposes lawful.”, s. 155 Mining Act 1992 warrants consideration. It is as follows:
“155.	No entry until compensation agreed or determined.
The holder of a tenement shall not enter onto or occupy any land, the subject of the tenement, for the purpose of mining, until—
(a)	he has made an agreement with the landholders as to the amount, times and 	mode of compensation and the agreement has been registered in accordance 	with Section 156(6); or
(b)	compensation has been determined in accordance with this Part and the 	holder of the tenement has paid or tendered such compensation as is then 	due.”

19.   “Landholder” is defined as: 
“"landholder" means—
(a)	a person who is recognized as an owner of customary land; or
(b)	a person who is in occupancy of Government land by virtue of an agreement 	with the State; or
(c)	a person who is the owner or lawful occupant of land other than customary 	land or Government land;”
20.    It is not in dispute as I understand, that the subject land is customary land. I concur with the submission of Summit that compensation is pursuant to an agreement with landholders - persons who are recognised as owners of customary land - and not a company. MKHT being a company and not a landholder as defined is not entitled to any compensation.

21.    As to MKHT’s claim to damages, I also concur with Summit’s submissions given that as there is no right to the tenement and no right to compensation, MKHT’s entitlement to damages is very limited. Further, from a perusal of the statement of claim, parts of which are unintelligible, it is difficult to form the view that the pleadings in the statement of claim provide a proper basis for any right to damages. I note in this regard that MKHT has not amended its statement of claim since the last dismissal application, notwithstanding that possibility being alluded to by this court.

22.    Consequently, I am satisfied that MKHT’s claim is untenable and cannot succeed and MKHT is bound to fail if the matter went to trial. Proceedings have been held to be frivolous if the plaintiff would be bound to fail if the matter went to trial: Ronny Wabia v. BP Exploration Operating Co Ltd [1998] PNGLR 8, Kiee Toap v. The State (2004) N2731, N2766, Lerro v. Stagg (2006) N 3050 and Tampion v. Anderson [1973] VR 321.

23.    Further, I am not satisfied that MKHT has disclosed that it has a reasonable cause of action. Given the above, the proceeding should be dismissed.

Orders
24.
a)	This proceeding is dismissed;
b)	 The plaintiff shall pay all of the defendants’ costs of and incidental to 	this proceeding to be taxed if not otherwise agreed.
c)	Time is abridged.

____________________________________________________________
Gagma Legal Services:    Lawyers for the Plaintiff                                      
Mineral Resources Authority:  Lawyers for the First to Fourth Defendants       
Solicitor General:  Lawyers for the Fifth and Sixth Defendants       
Gadens Lawyers:   Lawyers for the Seventh Defendant