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Makolkol Development Resources Ltd v Gogi [2017] PGNC 137; N6797 (4 July 2017)

N6797

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 16 OF 2017

BETWEEN:
MAKOLKOL DEVELOPMENT RESOURCES LIMITED
First Plaintiff

AND:
AGATHA MORI
Second Plaintiff

AND:
GABRIEL GOGI
Defendant

Kokopo: Anis AJ
2017: 16 June & 4 July

NOTICE OF MOTION – application to refer matter to mediation - rule 4(2)(c) - whether correct source cited - 5(2) of the ADR rules discussed - issues relate to interpretation and determination of the terms of agreements - matter does not require participation of all landowners or raises possible jurisdictional issues - motion declined

Case cited

Nil

Counsel

Mr T. Tape, for the Plaintiffs
Mrs N.Rainol, for the Defendant

RULING

4^th July, 2017

1. ANIS AJ: On 16 June 2017, the plaintiffs applied to this Court to request the proceeding to be referred to mediation. The application (motion) was contested. I reserved my ruling after I heard submissions from both sides, to a date to be advised.

2. I rule on it now.

Motion

3. The plaintiffs' motion was filed on 25 May 2017. Let me quote the main relief:

Pursuant to Rule 4(2)(c) of the ADR Rules, the substantive proceeding be mediated in accordance with the ADR Rules together with Court proceeding OS No. 133 - Gabriel Gogi and Others -vs- Agatha Mori & Others and all other issues relating to FCA 15-09, Malkolkol, Lasul Baining LLG, Gazelle District.

4. The plaintiffs relied on three (3) affidavits, namely, (i) affidavit of John Sako sworn and filed on 25 May 2017, (ii) affidavit of William Labu also sworn and filed on 25 May 2017 and (iii) affidavit of Agatha Mori, sworn on 31 January 2017 and filed on 13 February 2017.

5. The defendant relied on two (2) affidavits, namely, (i) affidavit of John Sako sworn on 9 June 2017 and filed on 13 June 2017 and (ii) affidavit of Gabriel Gogi sworn on 9 June 2017 and filed on 13 June 2017. I note that the defendant also refers to other affidavits sworn in the related proceedings.

Source

6. The source of the motion was based on Rule 4(2)(c) of the ADR Rules. It reads and I quote:

4. Exhaustion of or Dispensation with Mediation.

.....

(2) Subject to Sub-rules (3) and (4) on the hearing of an application for leave, the Court may make any one or more of the following orders:

.....

(c) that the matter be mediated and a mediator appointed in accordance with Rules 5 and 6 respectively.

7. I note that both parties agree that this was an application for a court annexed mediation order. I see that in their submissions both oral and written. I find the parties' understanding to be correct. Having said that, it seems clear that the correct source of the motion should have been Rule 5(2) and not 4(2)(c) of the ADR Rules. Rule 5(2) states and I quote, The Court shall on the request of all parties to a proceeding or on the application of any party to a proceeding or on its own motion order mediation...... Rule 4(2)(c) contains options that the Court may apply whilst hearing an application for leave to dispense with mediation. I find that to be an error committed by the plaintiffs, that is, by citing an incorrect source in their motion. But because there is no serious opposition on this point by the defendant and as I have said, both parties have conceded that this was an application by the plaintiffs to request the Court to sanction mediation, I will proceed to deal with the motion and determine its merit. I will proceed based on the parties' understanding and submissions, which is reflected in Rule 5(2) instead of Rule 4(2)(c) of the ADR Rules.

Dispute

8. The first plaintiff is a landowner company. The second plaintiff is its chairlady. The first plaintiff holds a Forest Clearance Authority (FCA) licence to clear forest. Its licence is described as FCA 15-09. The FCA was granted to the first plaintiff to carry out large-scale forest clearance for commercial agriculture or other related developments. It was granted over a land mass of 23,656 hectares within Lassul, Baining LLG, Gazelle District in East New Britain Province. The first plaintiff has engaged a contractor called KL Connections Limited to clear the forest under the FCA licence. The land within the FCA licence is divided into five (5) blocks, which was done within the terms of the FCA.

9. Let me explain the plaintiffs' grievance for coming to the Court. The plaintiffs say that out of the five (5) marked blocks of land within the FCA licence area, the defendant and the plaintiffs namely the second plaintiff have an agreement in place which was signed on 29 June 2016 (the agreement) in relation to blocks one (1) and three (3) within the FCA area. The agreement says in summary that the second plaintiff and the defendant shall be entitled to 50% each of all monetary benefits that are derived out of logs that are felled in blocks one (1) and three (3) of the FCA licence area. The plaintiffs say the agreement went well and has ended. The plaintiffs say they and the contractor, have now proceeded onto blocks two (2), four (4) and five (5) to fell logs. But the plaintiffs say the defendant is interfering with their activities. The plaintiffs say, based on the agreement and an earlier oral agreement or understanding they had reached with the defendant, the defendant has waived his rights to any benefit sharing for blocks two (2), four (4) and five (5).

10. The defendant does not deny the existence of the agreement. But he says the agreement has nothing to do with blocks two (2), four (4) and five (5) which the plaintiffs and the contractor are now logging. He says the purpose of the agreement was to relieve the plaintiffs from imminent contempt proceedings, which had existed at that time in relation to an alleged breach of a District Court Order. The defendant says that as a consideration for him withdrawing the contempt charges against the second plaintiff, the plaintiffs agreed to allow him and his group of landowners to receive 50% of all monetary proceeds derived from logs felled at blocks one (1) and three (3). He says it was only on that basis that he signed the agreement. He says the terms and conditions of the agreement are express.

Material issue

11. The real issue, in my opinion, is one under contract law. That is, the Court is being asked to look at the terms of the agreement and consider whether there are other conditions whether implied or otherwise, and whether there was an earlier oral agreement between the parties, and if so what were its terms and conditions?

Would ADR be a better option?

12. In my opinion, the main issue has nothing to do with the mass or the rest of the landowners back in the village, as submitted by the plaintiffs in Court.

13. Ownership of customary land is also not an issue in this proceeding. I however note that the plaintiffs have attempted to raise the issue, in their two (2) supporting affidavits, namely (i) affidavit of William Labu filed on 25 May 2017 and (ii) affidavit John Sako filed on 25 May 2017. These two (2) persons allege that the defendant is not a landowner to the land within the FCA area. Their claim has attracted submissions from the defendant to say that perhaps the National Court has no jurisdiction to deal with the matter. I find the two (2) evidence and arguments on point misconceived and irrelevant to the issues as pleaded in the statement of claim and defence.

14. The main issue, which this Court can quickly determine is in contract as I have said above in my judgment. The parties to the agreement, in my view, should be the ones giving evidence and it would then be a matter for the Court to determine. Since the issue will require specific interpretation or determination in relation to the terms of the agreements, I do not think that this matter is suitable for mediation, at least not at this stage. The legal issues at present would obviously be an impediment to mediation. But once the contractual terms are settled or clarified by the Court, that may then of course open up avenues for the parties to talk settlement. Seeking interpretation or determining terms of a contract would be, in my view, best left with the Court to resolve.

15. I have also had regard to the matters listed under Rule 5(3) of the ADR Rules. It states and I quote:

(3) At the time of considering whether or not to order mediation, the Court shall have regard to the following factors:

(a) whether the mediation will result in prejudice to the rights of any of the parties;

(b) whether it is reasonably within the ability and the power of a party to comply with an order for mediation having regard to matters such as any urgency in the proceedings, costs, multiplicity of parties or lack of resources;

(c) whether the mediation will require substantial work which could be better directed to preparation for trial;

(d) the nature of the relief sought and the suitability of a mediation result;

(e) the timing of the mediation including by reference to the status of the pleadings, discovery and the alternatives of when trial is likely and the length and costs of trial;

(f) the attitude of the parties to mediation though not significant;

(g) whether mediation was earlier attempted and whether any good purpose will be served by an order for further mediation;

(h) the appropriateness of deferring any final decision on a application for orders for mediation; and

(i) what the interest of justice in the particular circumstances of the case require.

16. I am satisfied as I have set out above in my judgment, as to why the matter should proceed to trial. Secondly, I find that the interest of justice requires that this Court should firstly interpret or determine issues relating to what was agreed to between the parties.

Decision

17. I therefore refuse the plaintiffs' application. Costs will follow the event.

18. In addition, I will also issue directions to prepare the matter for trial without delay.

19. I make the following orders:

(i) The plaintiffs' notice of motion filed on 25 May 2017 is refused.

(ii) The plaintiffs shall pay the defendant's costs of the motion on a party/party basis, which shall be taxed if not agreed.

(iii) The plaintiffs to file and serve any further affidavits (if needed to) before or by 11 July 2017.

(iv) The defendant to file and serve any affidavits in reply (if needed to) before or by 18 July 2017.

(v) Parties to settle and file a statement of agreed and disputed facts and legal issues, and give the required notices under the Evidence Act, before or by 24 July 2017.

(vi) The matter is listed for pre-trial status conference at 9:30am on 25 July 2017.

(vii) Time is abridged.

The Court orders accordingly.
___________________________________________________________
Kandawalyn Lawyers: Lawyers for the Plaintiffs
NatPhil & Associate Lawyers: Lawyers for the Defendant