N6802

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

OS. NO. 64 of 2015

BETWEEN
KANGA KAWIRA of the Hewa sub clan of Kutage Tribe, Hela Province and for and on behalf of the Kutage Tribe
Plaintiff

AND
KEPAYA BONE of the Alipe sub clan of the Ere Clan of Kutage Tribe & HETO AREPA of the Ingayapa sub clan of the Ere Clan of Kutage Tribe
First Defendants

AND
DEPARTMENT OF LANDS AND PHYSICAL PLANNING
Second Defendant

AND
ROMILY KILA PAT – Secretary for Lands & Physical Planning 
Third Defendant

AND
SAM TAISON – Registrar for Lands & Physical Planning 
Fourth Defendant

AND
SIMON MALU – Director for Land Acquisition, Department of Lands & Physical Planning 
Fifth Defendant

AND
JOHN KISU – Highlands Regional Manager, Department of Lands & Physical Planning
Sixth Defendant
 
Waigani: 	Kandakasi, J.
2016:	20th July   
2017:	05th July   

LAW OF BUSINESS ASSOCIATIONS  - Incorporated Land Groups -Requirements for incorporation of – Public, transparent and open process – Intended to ensure all persons having an interest and or stand to be affected are informed, their views are received and considered before incorporation  – Challenge against incorporation  – Onus on persons incorporating an ILG to demonstrate meeting of all statutory requirements – Failure to do so means requirements not met. Incorporation liable to be declared a nullity and set aside – Incorporated Land Groups Act, ss. 1,5,8,5B,33,6 and 5A .

LAW OF BUSINESS ASSOCIATIONS - Incorporated Land Groups – Only recognized incorporated entity for customary landowning groups – Acquisition by State and or developments on or affecting customary land and their landowners - Duties of the State and developers – State, including the Registrar of ILGs and developer under an obligation  to properly ascertain and organise customary landowners into ILGs and obtain their social license for their investment and project’s security – Process adopted to incorporate ILGs must be open and transparent with all interested and persons who stand to be affected fully participating – No acquisition or any major development on customary land should occur without first properly organising the landowners into ILGs – Lands Act 1996 s.13 and Oil and Gas Act 1998 s.47, 169 (2) (b) and 176 (3) (f).

LAWYERS – Duties and responsibility of lawyers – Duty to resolve matters promptly and avoid unnecessary delays and increased costs – ADR Rules providing a process to assist lawyers to properly and meaningful discharge their duties and responsibilities – Lawyers role is to follow orders for mediation, before during and after conduct of mediation – Breach of – Client to determine if lawyer should reimburse fees and costs forced upon them by lawyers failures – National Court Act ss.7A-7E - Professional Conduct Rules r. 8 (6) and (7) and r. 15 (2), (4) (a) and (b) and (10)  - ADR Rules, rr. 5 (2) 9(3), and 10 (7).0  

MEDIATION – Unlike a court process mediation process is future focused whilst forgiving and building from the past by exploring all options and settling upon one most workable – An open and transparent process for all parties and persons with interest and standing to be affected - Capable of establishing the truth in the presence and scrutiny of all parties and persons in possession of the truth -  Most suitable process for resolution of cases involving customary landownership and other rights –All the members of a land owning or interest group in dispute can attend.

MEDIATION - Mediation ordered - Bad faith at mediation – Repeated failures to attend appointed dates for intake for mediation – Repeated failures to comply with Court orders amounting to clear case of contempt – Bad faith certificate issued – Defaulting party maintaining arguments already raised and considered by the Court before ordering mediation - No satisfactory and reasonable explanation for bad faith and contemptuous conduct offered – No issue warranting resolution by trial presented – Most suitable case for mediation but fair opportunity not given – Mediation reordered at defaulting parties costs - Parties ordered to return to mediation and give it fair chance with warnings of contempt of court proceedings if the same defaulting parties and their lawyer default again.

PNG Cases cited:

Alex Bernard & P’Nyang Resources Association Inc. v. Hon. Nixon Duban, MP, Minister for Petroleum & Ors (2016) N6299.
Akipa & Os v Lowa & Os [1990] PNGLR 502.
Abel Constructions Ltd v. W.R. Carpenter (PNG) Ltd (2014) N5636.
Alex Awesa & Anor v. PNG Power Limited (2014) N5708.
Barrick (Niugini) Ltd v John Tole Pokoli (2015) SC1438.
Belden Norman Namah v. Rimbink Pato (2016) SC1497.
Hii Yii Ann v. Canisius Kami Karingu (2003) SC718.
Hornibrook Constructions Pty Ltd v Kawas Express Corporation Pty Ltd [1986] PNGLR 301. 
John Kotape & Ors v. McConnell Dowell Construction PNG Ltd & Ors (2016) (unreported and yet to be numbered judgement of Logan, Kandakasi and Neil).
Ken Norae Mondiai v. Wawoi Guavi Timber Company Limited (2007) N3120.
Kerry Lerro trading as Hulu Hara Investments Limited v. Philip Stagg, Valentine Kambori & The State (2006) N3050.
Koitaki Plantations Ltd v. Charlton Ltd trading as Kookabura Meats & Stuart Fancy (2014) N5656.
Leo Maniwa & Ors. v. Aron Malijiwi & Ors. (2013) N5687.
Maniosa Yakasa v. David Piso (2014) SC1330.
Michael Pundari v. Niolam Security Ltd (2011) SC1123.
Maniosa Yakasa v. David Piso (2014) SC1330.
Michael Pundari v. Niolam Security Ltd (2011) SC1123.
Meckpi v. Fallon and Dekenai Constructions Ltd (2017) N6708.
Moi Avei v. Charles Maino [2000] PNGLR 157.
Mt Hagen Local Level Government v. Sek No.15 (2009) SC 1007.
Motor Vehicles Insurance (PNG) Trust v. Waige, Jack and Gedua [1995] PNGLR 202.
Mineral Resources Development Company Ltd v. Mathew Sisimolu (2010) SC1090.
New Britain Oil Palm Ltd v. Vitus Sukuramu (2008) SC946.
Nathan Koti & Ors v. David Susame & Ors (2015) N5860.
Nathan Koti & Ors v. David Susame & Ors (2017) N6586.
Philip Takori & Others v. Simon Yagari & 2 Others (2008) SC 905.
Papua New Guinea Banking Corporation v. Tole (2002) SC 694.
Public Officers Superannuation Fund Board v. Sailas Imanakuan (2001) SC677.
Rimbink Pato v. Reuben Kaiulo (2003) N2455
Simon J Solo v. Amkat Mai; John Taluh Tekwie v. Amkat Mai (2013) N5562
The State v. Isaiah Guda (2015) N5955.
The State v. Tony Tomong (2011) N5140.
The State v. Moses Jafisa Winga (No 1) (2005) N2952.
Wilson v. Howard [1994] PNGLR 418.
Wantok Gaming Systems Ltd v. National Gaming Control Board (2014) N5809.

Legislation:

Land Group Incorporated Act CH: 147 

Counsel:

E. Komia, for the Plaintiffs
J. Kumara, for the First Defendants
J. Siki, for the Second to Sixth Defendants

05th July, 2017

1.	KANDAKASI J: The Plaintiffs are seeking mainly a declaration that the incorporation of two Incorporated Land Groups (ILGs), Ere and Hewa ILGs by the First Defendants, are illegal, unlawful, null and void ab initio. This is for failing to meet the mandatory requirements of the Land Groups Incorporation Act (Chapter 147) consolidated to No 29 of 2009 (ILG Act).  The ILGs were incorporated to pursue and receive compensation monies due to the original customary land owners from the State for an acquisition of their land now describe as Portion 88C and 89C, Millinch Hoyevia, Fourmil Wabag, Hela Province (the Land).  It is now accepted that, the land is State land.  Convinced that this matter is most suitable for resolution by mediation with no issue warranting judicial determination presented, the Court ordered it to be resolved by mediation.  However, consistent with their attitude of not wanting to go to mediation, the First Defendants and their lawyers failed to turn up for mediation intake meetings on three different occasions. Consequently, the Court appointed mediator issued a “bad faith” certificate against them.  The matter is now before the Court for the Court to decide what consequence should follow the First Defendants’ bad faith under r.10 (7) of the ADR Rules.

Parties Arguments

2.	The First Defendants argue that, the Court erred in ordering mediation at the first place when they raised the issue of customary land ownership and a lack of notice under s. 5 of the Claims by and Against the State Act, which should have been determined first.  As for the bad faith certificate, they claim, they had no notice of the two out of the three days fixed for the mediation intake due to their lawyer’s email not functioning.  For the third day, they claim their lawyer was engaged in a District Court proceeding without giving any specifics.  Hence, they argue, there was no basis for the issuance of the bad faith certificate. Without addressing the question of what consequence should follow their bad faith conduct, they a pressing for a hearing of the issues they raise.

3.	On the other hand, the Plaintiff and the rest of the Defendants argue that, after considering all matters, the Court correctly ordered mediation. On the First Defendants bad faith conduct, they argue that, these defendants and their lawyers failed to attend without any good reason on the three different appointments purposely set for their attendance. That was despite the First Defendants having prior notice of the appointments.  The Plaintiff and the rest of the defendants, also argue that mediation is the most appropriate process to resolve this matter which the First Defendants failed to give it a fair chance by their repeated breaches of the Court’s orders which amount to contempt of Court.  Accordingly, the Plaintiffs argue for penalties against the First Defendants without specifying a penalty.  The Second to the Sixth Defendants argue for the Court to re-order the parties to go back to mediation because it is the most suitable process to resolve this matter.  

Relevant Issues

4.	From the parties’ arguments, the following are the main issues for this Court to consider and determine:

(1)	Was there basis for the mediator to issue the bad faith certificate against the First Defendants?

(2)	Were the First Defendants entitled to take issue with the Court’s order for mediation?

(3)	What is the most appropriate penalty for the First Defendants bad faith and contemptuous conduct?

Issues 1 & 2
Bad faith certificate and taking issue with the mediation orders

5. 	I will deal firstly with the first two issues together.  In light of the First Defendants’ arguments, this requires a consideration of the:

(a)	basis upon which the Court ordered mediation;
(b)	steps each of the parties took to comply with mediation orders;
(c)	basis upon which the mediator issued the bad faith certificate against the First Defendants;
(d)	parties arguments against the issuance of the bad faith certificate against the First Defendants; and 
(e)	the First Defendants arguments against the orders for mediation. 

(i)	Evidence

6.	The relevant evidence is in a number of affidavits filed after the issuance of the mediator’s bad faith certificate against the First Defendants and various other affidavits on the Court file, and a number of Court file endorsements.  The latter reveals the kinds of orders and directions the Court issued including the order for mediation and orders subsequent to that.   

(ii)	Relevant factual background

7.	Initially, the Plaintiffs acting in person filed this proceeding on 12th February 2015. Hence, they have not pleaded their cause of action well enough to bring out the real issues.  Later, they were able to secure the services of Mr. E. Komia. Although, an amended originating summons was later filed for the Plaintiffs, with respect, that failed to clearly bring out the real issues in this proceeding.  Through a number of directions, it became apparent that the State acquired during the colonial times the Land, the subject of this proceeding. Following that acquisition, the State built on the Land the Kutage Aid Post and the Kutage Primary School.  Much later in around 2012, the State decided to pay compensation.  For that purpose, the State carried out a valuation exercise and arrived at a figure of K6.4 million.   In order to receive the compensation payment, the First Defendants incorporated the Ere and Hewa ILGs which appear to have been done without the knowledge and informed consent of all of the landowning clans and tribe and or the neighbours.  Affidavit evidence filed by the Plaintiffs and the First Defendants own affidavits suggest Kepaya Bone and Heto Arepa are resident in Port Moresby.  They have not gone to their home Province of Hela and their clans and tribe and obtained the consent and approval of the respective clans and tribe or the Plaintiffs who were the original owners of the land.  The First Defendants have filed a number of affidavits but none of them give any evidence on how they went about incorporating the two ILGs. 

(iii)	The legislative scheme for incorporation of ILGs

8.	The ILG Act is the legislation that provides for and governs the incorporation of ILGs.   Section 1 says the purpose of the Act is first, to encourage greater participation in the national economy by Papua New Guinean’s through the use of customary land.  Secondly, it is to encourage Papua New Guineans to better use their land by:

(1)	giving them greater certainty of title;
(2)	giving them legal recognition of the corporate status of certain customary and similar groups;
(4)	giving the customary groups as corporations the power to acquire, hold, dispose of and manage land, and of ancillary powers; and
(5)	a better and more effectual self-resolution of disputes within the customary groups.

9.	Section 5 provides as to the manner in which customary land groups could be recognized. According to s.5 (1), the process starts with an application made by or on behalf of such a group to the Registrar of ILGs (the Registrar). The application for recognition must, aside from providing such other information required by the Registrar, be:

(1)	in the prescribed form; 
(2)	accompanied by a copy of the group’s proposed constitution;
(3)	accompanied by a list of all members of the group;
(4)	contain further information as stated in Schedule 1 being such certified information required in the application form; and
(5)	be accompanied by a sketch of the boundaries of the land to which the applicants claim ownership, including clearly marked areas of disputed boundaries if any, to which the applicants claim ownership as required under Schedule 2.

10.	Schedule 1 prescribes the following as the material that must be provided:

(1)	The proposed name of the land group;
(2)	A true and complete list of its members including the qualification of each listed member;
(3)	Where a member is under a disability, the name and qualification of his guardian; 
(4)	The original or in its absence a certified copy of the birth certificate of each person who claims membership of the group;
(5)	The qualification of the group seeking recognition as an incorporated land group stating they are not members of another incorporated land group;
(6)	A description of the land and the nature of the interest therein to which the group claims an entitlement, including a map, if available, or sketch map or drawing of the land over which the applicants claim ownership or an interest therein, with reference to which they seek to be incorporated, in a manner specified in the Schedule 2;
(7)	A certified copy of the constitution of the land group;
(8)	A list of members of the management committee and other officers of the land group; and
(9)	The proposed dispute settlement authority of the land group.

11.	Schedule 2 elaborates on the requirement for a description of the land and the need for the provision of a map or a sketch. It stipulates that:

(1)	The map or sketch of the land must contain a general description of the land including:
(a)	its size and location; and
(b)	use; and
(c)	boundaries; and
(d)	the names of the village and clan;
(2)	If there is any dispute over the land or boundaries, the exact location of the disputed boundary or boundaries and the nature of the dispute noted on the document;
(3)	The document must be dated and must be signed by the chairman or vice chairman of the land group; and
(4)	The existence of a boundary dispute should be acknowledged by the relevant neighbour(s), or in their absence or refusal, the village court official or councillor/ward member, countersigning the document.

12.	Section 8 stipulates what must be included in an ILG’s constitution, which is elaborated by Schedule 3.  A combined reading of these two provisions makes it clear that the constitution in addition to the name of the ILG must contain the following:

(1)	A description of the area, being the land in or over which the group has, under recognized customary law, exercised rights recorded under Schedule 2;
(2)	The persons who are the original members of the group;
(3)	The persons to whom membership is open;
(4)	The titles of group representatives (management committee) officers and auditors and their terms of office, method of election, appointment, dismissal and suspension;
(5)	The composition of committees (if any) of the group, the term of office of members of such committees, the method of their election, appointment, dismissal and suspension;
(6)	The authority for and the method of filling vacancies occurring amongst the officers of the group, and on committees, not in a manner inconsistent with the Act;
(7)	The frequency, quorums, method of calling and dates of the annual general meeting, referred to in Sections 14A, 14B, 14C, 14D and 14F;
(8)	The custody, and investment of the funds and property of the group, and the designation of the persons responsible for them;
(9)	The purposes for which the funds and property of the group may be used;
(10)	The maintenance and inspection of books of account, the register of members and the record of interests, by any member or officer of the group, and by or on the order of the Registrar referred to in Sections 14H and 14I;
(11)	The periodic audit of accounts;
(12)	The manner of making rules of the Association;
(13)	The manner of amending the name, constitution or rules of the Association; and
(14)	The manner of the dissolution of the Association and the disposal of its property on dissolution.

13.	The use of the word “Association” in paragraphs 13 - 15 in the schedule or 12 -14 in my above listing appears to be a mistake by the draftsman.  I am of the view that, this is an obvious draftsman error.  The context suggests strongly that the correct word or phrase should be land group or ILG.  Hence, the reference to “Association” should be understood to mean a reference to a land group or an ILG.

14.	Then most importantly, Schedule 4 stipulates a number of matters deemed to be included in the constitution of an ILG. These are amongst others:

(1)	The constitution relates to the area of the land determined as being in the ownership of the group, or in respect of which that group has an interest, and therein described in the sketch plan;
(2)	All persons who are recorded as having an interest in the group and the land shall be entitled to become members of the group;
(3)	Unless recorded in the register as a member of the group, no person shall be admitted to membership of the group except -
(a)	that person has inherited an interest from a person who was recorded on that register; or
(b)	the group representatives (management committee) all agree and the representatives’ decision is confirmed at an annual general meeting of the group; or
(c)	a court so orders;
(4)	The rights of membership shall extend to all members regardless of how membership was obtained;
(5)	Every member shall have a right to reside free of charge on the group land together with his family and dependants;
(6)	Every member shall be entitled to permit any other person to reside with him on the group land unless the group representatives decide otherwise in any particular case;
(7)	Every member shall be entitled to the use of the land, water rights, machinery, credit facilities, veterinary services, marketing arrangements, transport and other assets in the group ownership subject to such conditions as may from time to time be imposed in accordance with the constitution, which may include the levy of access, fees or other charges;
(8)	Every member shall be entitled to attend, speak, be heard and to vote at all general meetings of the group;
(9)	The obligations of membership shall extend to all members regardless of how membership was obtained;
(10)	No disposition of any of the group’s land or any interest therein, may be made by the group representatives unless approved by the members;
(11)	The group representatives shall inform the members of the group of the activities carried on in the preceding period at each general meeting; and
(12)	The group representatives shall ensure that the rights of any person recognized under customary law are safeguarded in so far as that is compatible with the operations of the group.

15.	Schedule 5 adds the following additional deemed provisions unless expressly excluded or modified:

(1)	There shall be not more than ten and not less than five members of the management committee (group representatives) elected from among the members of the group in a general meeting, by a majority representing not less that (sic) sixty per cent of the votes of all the members present at the meeting;
(2)	If at any time there are less than five group representatives a general meeting shall be convened for the purpose of holding new elections to appoint them;
(3)	The group representatives shall consult the members of the group in a general meeting before disposing of any land held by the group or any interest in such land;
(4)	The group representatives shall meet whenever required and not less than once in every six months. Unless otherwise required by the Act or the rules, the group representatives may establish their own procedure provided that no business shall be transacted at any meeting unless three group representatives are present in person;
(5)	The group shall in each year hold a general meeting as its annual general meeting in addition to any other meetings in that year, and shall be specified as such in the notices calling it;
(6)	Notice of the dates on which any general meeting of the group is to be held shall be given to all members not less than two weeks in advance;
(9)	The quorum for a general meeting of the group shall be not less than sixty per cent of the total number of members of the group;
(10)	No member shall be entitled to vote at any general meeting otherwise than in person unless he is recorded in the register of members as being under disability in which case the guardian of a member under a disability may vote on his behalf;
(11)	Except with the approval of the Registrar, nominations for office under the constitution of the group shall be of members only, and may be made and seconded by members only;
(12)	The management committee of the group shall consist of a chairman, vice-chairman, secretary, treasurer, and three other members, of whom not less than two shall be elected from amongst the female  group members;
(13)	All the members of the committee shall be elected by open ballot at the group's annual general meeting, or at any subsequent general meeting convened for that purpose, and shall hold office for two years unless otherwise removed;
(14)	At the end of his period of office any member of the committee shall be eligible for re-election;
(15)	The committee shall meet not less frequently than once every three months;
(16) 	The committee shall be responsible for conducting the affairs of the group with a view to achieving the greatest practicable social and economic benefit for the members;
(17) 	The committee shall be responsible for preparing a plan for the registration and development of the land and for the implementation of that plan and in the preparation of that plan the committee shall consult with the Registrar and submit to the group in general meeting for approval;
(18)	The committee shall be responsible —
(a)	for maintaining —
(i)	a register of all members of the group; and
(ii)	full and accurate minutes of all general meetings of the group, and of all meetings of the committee; and
(iii)	a full and accurate account of the income and expenditure and of the assets and liabilities of the group; and
(b)	for presenting such accounts within three months of the end of the financial year to the Registrar for approval; and
(19)		The provisions of the constitution, other than those which may from time to time be prescribed, may be altered, repealed or added to by a resolution passed by a sixty per cent majority of the members of the group present in person or by proxy at a special general meeting convened for that purpose and of which due notice has been given.

16.	The Act in Schedule 7 gives a pro forma constitution, which appear to make provision for the kind of things that the constitution should have.

17.	Upon receipt of an application that meets all of the foregoing requirements, the Registrar is then required by s. 5B to “cause notice of all applications for recognition made under Section 5 to be published in the National Gazette and forward copies to”: 

(i)	the district administrator in whose area the group or any of the property claimed on behalf of the land group is situated; and
(ii)	the village court within whose jurisdiction members of the group reside.

18.	The same provision requires the district administrator or the village court upon receipt of the notice to “further disseminate notice of the application and particulars.” This can be done in “such manner they think most likely to ensure that it [the notice] is widely known to persons having knowledge of or an interest in the affairs of the land group or its members.” 

19.	Section 33 (1) and (2) strengthen and elaborate on the requirements for giving notice under s.5B (1). It requires the Registrar to give copies of the notice published in the National Gazette to “any Local Government Council in whose area (i) the group or any of the property of the group is; or (ii) any property that is proposed to become property of the group by virtue of the recognition, is situated.”  The requirement for service of the notice on “any Village Court within whose jurisdiction the group is, or will on recognition come”, is repeated in these provisions.  Subsection (2) of s. 33 goes on to require the Registrar to “publicly promulgate notice of a matter referred to in subsection (1)”, which is in this case, an application for recognition as customary land group is given, “in such manner as he thinks most likely to ensure that it [the application] is generally known to persons having”:

“(i)	a knowledge of or an interest in the affairs of the group or of the members of the group; or
(ii)	a knowledge of the relationship between the group or members of the group and other persons and customary groups”.

20.	Section 6 adds by requiring the Registrar to additionally:

“(b)	call for and consider comments from any Local Government Council or Village Court … and from the proposed dispute-settlement authority; and
(c)	consider any comments made by any person referred to in Section 33(2),
and may call for and consider any other information that he thinks relevant.”

21.	The comments must cover the matters provided for in s. 5 (3), (4), (5) or (6).  The remaining provisions cover the issues of:

(a)	the members are part only of a customary group or are members of another incorporated land group; or
(b)	the group includes persons who are not members of the primary customary group, if the Registrar is satisfied that those persons regard themselves, and are regarded by the others, as bound by the relevant customs of the primary customary group; or
(c)	the group is made up of members of various customary groups, if the Registrar is satisfied that the group possesses common interests and coherence independently of the proposed recognition, and share or are prepared to share common customs; or
(d)	a combination of those circumstances; or
(e)	the land group consists only of incorporated land groups, if the Registrar is satisfied that “(a) the member groups possess common interests and coherence independently of the proposed recognition, and share or are prepared to share common customs; and (b) the association between the groups represents a customary form of organization”.

22.	The comments must also cover other important aspects such as the proposed constitution, the “form and likely efficacy of the proposed method of dispute-settlement” and “any other matter relevant to the question. They must also cover how appropriate would the proposed recognition be, and, in the case of the proposed dispute-settlement authority, whether he is willing and able to act.”

23.	The Act anticipates disputes in the proposed formation and incorporation of ILGs.  Accordingly, it makes provision in s. 5A to deal with that issue.  This provisions stipulates that:  

“If it appears to the Registrar that there are internal disputes relating to the identity of the group’s representatives, officers or membership, the Registrar shall determine whether to —
(a)	reject the application; or
(b)	withhold the processing of the application until the Registrar is satisfied, based on subsequent evidence, that the internal dispute has been settled and then proceed to incorporate the applicants.

24.	Also whilst talking about disputes, the Act by s. 21 makes it compulsory for a customary group applying for recognition to “have at least one dispute-settlement authority.” The dispute-settlement authority may be a person or a number of persons, specified by name, by office or position or determined in the manner specified in the constitution of the group, or a combination of any such persons. Provision is also made for allowing the parties to a dispute to agree on an ad hoc dispute-settlement authority in relation to their dispute.  

25.	Finally, provided the Registrar is satisfied with an application meeting all of the requirements set out above, he “may recognize a customary group of persons as an incorporated land group, by issuing to it a certificate of recognition under s.5 (1). However, s. 5B(2) prohibits the Registrar from issuing such a certificate “unless he receives from the district administrator or a village court a confirmation notice of receipt of the documentation referred to in Subsection (1) and that they have complied with Subsection (1) (b)” namely notice of all applications for recognition made and published in the National Gazette.

26.	Land is very important to all persons throughout the world and Papua New Guinea is no exception. A lot of wars have been fought and enmity between nations, tribes, clans, sub-clans, families and individuals exist over land.  Losing one’s land to thieves and fraudsters can be very devastating as it could affect the very existence of a person, his or her family, sub-clan, clan, or tribe or even his or her nation. Parliament was very much aware of that fact. Accordingly, it put in the requirements in the ILG Act for notice of an application for recognition as a customary land group to be published widely. This was to give real opportunity especially, to those who have an interest in the land the subject of an application and or those who stand to be affected to be made aware of the application. This is necessary to ensure such persons are aware of the application and for them to object if they have not given their free and informed consent at the first place.  This is not a mere formality.  It is a requirement that must in fact be met and only after that is done, should an application for recognition as a customary group be granted.

27. 	A careful consideration of what the ILG Act provides for makes it abundantly clear that, incorporating an ILG is a very public and an open process.  This is so for a very good reason. Unlike, a private company which is usually incorporated by one to a few people for their own private and personal interest, using their own money and other resources, ILGs concerns land and other interests of groups of customary people living on and off customary land.  It is thus important that those who have interests or stand to be affected by any ILG incorporation in any manner or form are informed and their free and informed consent is first sought and obtained.  Given that, it is clear that no ILG could be incorporated without the knowledge, meaningful involvement and endorsement of the relevant, district administrator, the local level government and the village court in the area and most importantly, the persons who have an interest and or stand to be affected.  Through these levels of authority and the process of publishing the notice and feedback, it is intended that all persons who have an interest or stand to be affected by a proposed incorporation of an ILG are informed and are given a real and meaningful opportunity to give their views or responses to an application for incorporation of an ILG.  

28.	The comments or input from the sources mentioned above would be in either of two forms.  The first would be an endorsement of the application which would be straight forward.  That would be possible if all who have an interest or those who stand to be affected have been informed and their free and informed consent and approval was properly sought and secured at the first place by those who set out to have a land group incorporated or recognized.  The second kind of comments or response would be an objection.  This would come about if those who stand to be affected have not been properly informed and their free and informed consent and approval had not been first sought and obtained before the application for recognition was lodged.  Also, objections should be expected if the land identified in the map or sketch accompanying the application is not owned by the applicants or is no longer available to the applicants or the applicants have included land that does not belong to them.  Further, if the group seeking to be recognized does not exist, objections would also be mounted on this basis.  

29.	Apart from the requirement to publish in the National Gazette and copies sent to the relevant district administrator, the village court and the local level governments, there is no prescription in the ILG Act as to how the notices should be serve and how those who stand to be affected be informed. There are huge and serious challenges around ordinary people in PNG, especially those in the Provinces away from Port Moresby and other major centres and living in villages accessing such publications or any timely receipt of public and official information. Some of the offices to whom notices must be given are most difficult to access, the more one gets outside the city and town limits and their surroundings. Further, some of these offices exist in name only with no fixed addresses or if there are any, they are usually empty buildings.  If the notices are to be posted, there is the other problem of a vast majority of the people being illiterate and not being able to read and write.  The best way of communication in these difficult settings is by word of mouth. A critical question then becomes.  How should the persons who have an interest or stand to be affected by an incorporation of an ILG be informed and their responses sought, secured and considered?   

30.	In Alex Bernard & P’Nyang Resources Association Inc. v. Hon. Nixon Duban, MP, Minister for Petroleum & Ors (P’Nyang Case), I briefly considered the requirements of the ILG Act.  I then commented:
“No such recognition [incorporation of an ILG] would be possible, until a notice of intention to apply for such recognition has gone out and opportunity given for people in the area through the relevant district administrator and the relevant village court to comment upon. 

31.	Then at paragraph 67 of the judgment, I went on to comment upon the concept of a “person” which includes incorporated entities.  That was in the context of a reference to ILGs under s. 169 (2) (b) and s. 176 (3) (f) of the Oil and Gas Act 1998 (OGA).  I noted that the concept was foreign and new to PNG and pointed out: 

“In traditional societies throughout the country, no system existed to enable incorporation and the existence of incorporated entities. Only with the country coming into contact with the outside world and the introduction of modern commerce and industry, incorporated entities came into existence and the concept is accepted in a modern PNG. That is however, limited to cities and towns and where there exists an educated population. Most of the country remains the same as they were prior to the coming of the Whiteman and his ways. In the area of customary land, we do have the ILG Act, which gives an ILG separate personality and can do most of what incorporated entities can do.  Unfortunately, not many of our people are aware of the Act’s existence and its requirements. A few who know of the Act and its provisions have in the main, used it for their own personal gain. This has been with much loss and disadvantage to the majority of the people in a family, sub-clan or clans in which names ILGs have been incorporated and certain benefits channelled that way and received only by those behind the ILGs with nothing or very little going to the other members of the unit.”

32.	Many cases involving ILGs have come and continue to come to both the Supreme and National Courts.  A majority of these cases revolve around the natural resources extraction industry or sector, as recently highlight by the PNG LNG project, mining, logging and SABLs or payments for use of land by a number of business like the telecommunications companies for their transmission towers built on customary land.  The issues have and continue to be:

(1)	ILGs being formed and run without any knowledge, involvement and approval of all of the members of a clan or land group named in the ILG’s constitution;
(2)	funds in royalties or equities, customary land compensation or rentals for the use of such land meant for the a whole clan or group being channelled into ILGs and persons involved in the management of the ILG using the funds for their own personal gain without any knowledge or approval by the members of the clan or landowning group;
(3)	no proper election and appointment of the ILG leaders who appear to have an endless life in the ILG’s management; 
(4)	failure to conduct proper annual general meetings and or failing to table any form of report on how the ILG has been manage with annual statement of assets and liabilities tabled before lodging them with the Registrar; and
(5)	failures to update and keep proper records of the ILG’s membership and other business records.

33.	Parliament being aware of these, had the ILG Act amended in 2009 by Land Groups (Amendment) Act 2009. This amendment introduced specific requirements. They cover annual general and other meetings including those of the management committee making them more regular, increasing quorum requirements for general meetings to 60%.  They also provide for term of office and removal of persons holding office following conviction of crimes of dishonesty and fraud.  Most importantly, they also introduced requirements for opening of bank accounts and keeping of proper records with provision for supervisory oversight vested in the Registrar who could issue such instructions he considers appropriate with obligations imposed on the management committees to furnish annual statements of assets and liabilities.  This is topped off with offences created carrying serious penalties for any breach of these requirements.

(iv)	ILG incorporation in practice

34.	Despite these changes in the law, there are still many cases involving ILGs coming to the Courts which suggests, in practice there has been no real change. There might have been some improvement on the law but compliance is still a serious issue with many ILGs being incorporated without the knowledge and involvement and approval of the entire, family, sub-clan, clan or tribe as the case might.  If anything, most of the ILGs are a fraud against sub-clans, clans, tribes or land groups in whose name ILGs have been incorporated.   The decision of Gavara-Nanu J., in Leo Maniwa & Ors. v. Aron Malijiwi & Ors. is a case on point.  There, the defendants proceeded to incorporate an ILG and eventually secured a Special Business and Agricultural Lease (SABL) over a large portion of customary land.  This was purportedly with the consent and approval of the landowners but at trial, the defendants failed to produce evidence clearly meeting the relevant requirements of the ILG and Lands Acts.  The evidence adduced by the plaintiffs demonstrated that, there were no public awareness and proper meeting of the landowners at which all relevant issues were discussed and the free and informed consent and approval of the landowners were sought and given. The Court made orders declaring the SABL null and void and restored the land back to the people. Many more cases questioning the validity of incorporated ILGs are in the Courts. 

35.	Appreciating the problem as highlighted, a number of judges including myself have referred a number of cases involving or concerning ILGs or land owner associations or companies or other issues based on an interest in customary land for resolution by mediation on location.  This has seen Court appointed mediators and the parties going back to the parties’ village or customary areas.  Through this, real opportunities are being given to all persons affected or having an interest in the ILGs and more so the lands included in the ILGs constitution an opportunity to answer a number of basic but very important questions through well publicised open meetings facilitated by impartial third party National Court accredited mediators.  The questions include:

(1)	Are the members of the land group both individually and collectively aware of the existence of the ILGs?
(2)	If the answer to the first question is “yes”, is it one they incorporated in accordance with the ILG Act in that they had a meaningful part amongst others in its formation, adoption of its constitution, election of the office bearers and so on and they have given their free and informed consent and approval?
(3)	If the answer to the first two questions is yes, have those managing the affairs of the ILGs, have properly allowed for proper annual general meetings each year and properly accounted for their management including a proper management and application of any funds belonging to the ILG?
 (4)	If the answer to all of the first three questions or any of them is in the negative, do they wish to:
(a)	retain the ILG as it is; 
(b)	have the ILG restructured;
(c)	have a proper election of the office bears; or 
(d)	have the ILG replaced with a completely new one, this time in accordance with the ILG Act and more so with their free and informed consent and approval;
and take the appropriate corrective steps?

36.	An example of such a case, though not strictly involving a challenge to an ILG, is the matter of Nathan Koti & Ors v. David Susame & Ors. There, Cannings J., ordered the question of what relief should be granted to the plaintiffs to go to mediation after granting them judicial review against a Provincial Land Court decision. I eventually conducted the mediation which resulted in a resolution of the matters in dispute by all parties except for Nathan Koti.  The mediation was attended by all persons from all of the competing tribes and clans and meaningfully participated in a process that was more open and transparent with the people attending by the numbers and making their own choices and decisions.  Through that process, it was apparent that Mr. Koti purported to act on the instructions of his clan but was not.  The same was the case for a number of the other clans, who decided to have their self-appointed representatives replaced by their properly appointed representatives. The position Mr. Koti took was consistent with his conduct which did not confirm with the rest of the members of the customary groups he purported to represent and the rest of the parties to the proceeding. All of the parties except Mr. Koti sought an endorsement of the mediated agreement.  He sought a declaration that the mediation failed.  When the matter went back to Court, Cannings J, after hearing the parties decided in his decision now published as Nathan Koti & Ors v. David Susame & Ors to uphold the mediated agreement and made the terms of the agreement as orders of the Court.

37.	A much louder and stronger message is coming from the many cases entering the Courts and those referred to and being resolved by mediation or by judicial determination.   The message is, those who wish to have ILGs formed and properly incorporated, must completely meet the requirements of the ILG Act in an open and transparent manner. Of particular importance is the process through which they need to seek and secure the free and informed consent of the members of the customary land group in whose name an incorporated ILG is sought.  Also, through such a process, they need to seek and secure the free and informed consent, approval or endorsement of those who share land borders or boundaries with the applicants and others who might and have an interest or stand to be affected by incorporation of a land group.  This is necessary to confirm:

(1)	the applicants as a land owning group is entitled to have itself incorporated under the ILG Act;
(2)	it has ownership or other rights and interests in the land included in the application;
(3)	ensure there is no ownership or boundary disputes with its neighbours;
(4)	the group as a group is in fact applying for incorporation with the consent of the whole of its membership and no one has been left out;
(5)	the neighbours have no issue or dispute with the group and its application; and 
(6)	the leaders and authorities in the area witnessed and endorsed the application as an application by the group and not just one or two persons using the group’s name.

38.	In the particular difficult prevailing circumstances and settings of our country, such consent and approval can be best sought and secured through a public process.  The current practice of the Registrar acting purely on what he is told or is presented with on paper is not helping to achieve the true intend and purpose of the Act. But as noted, he is allowing for more fraudulent incorporations of ILGs and misuse and abuse of the real land owners, rights, powers, their funds and other properties.  It therefore behoves the Registrar as part of a State and government that should be protecting the interest of the people and safeguard against the kind of offences that are being committed against them to step out of the comforts of his office and do something practical on the ground.  I would suggest strongly that, the Registrar should take personal interest and be involved in the formation of ILGs strictly in accordance with the spirit and intention of the Act. 

 39.	Rather than facilitating fraud either deliberately or by his failure to properly administer and police compliance of the Act with its intent and purpose, the Registrar should be able to discharge his duties as suggested in this judgment by working closely only with those who mean well and are genuinely driven by a desire to benefit all of the members of the group.   The test for such persons would be seen in what they do.  Such persons would make the process from start to finish public and one that must be followed and completed openly involving the whole of the membership of their customary group and with the knowledge and endorsement of everyone else, be it the next door neighbours or other persons who stand to be affected or has an interest in the group and or the land to be put up for the proposed incorporation. Appreciating that stepping outside ones rights and boundaries could result in disputes and no incorporation, such genuine persons will also ensure to work within their clear and undisputed customary land rights or interest.  All this can happen through a number of meetings at which there should be in attendance to witness the event the relevant district administrator or his representative, the local level government council ward councillor on behalf of the local level government, the local village court officials and the Registrar or his representative.   The meetings should be for each of the following purposes or objectives:

(1)	Conduct public awareness amongst and for all of the members of the group and the neighbouring clans.  This should be facilitated by those wishing to have their land group incorporated as an ILG and the Registrar or his representative.  At this meeting there should be a complete outlining and explaining in a language the people can understand, without limiting the list, the following:
(a)	all of the requirements of the ILG Act;
(b)	advantages and disadvantages of having an ILG;
qualification for membership in the management committee and any other committees that might be established;
(d)	leadership, qualification for and how leaders for and within the ILG will be elected or appointed; and
(e)	a precise description and identification of the boundaries of the land to be included in the application, the relevant steps, when, where and how those steps can be taken and by whom;

(2)	Allow for a reasonable amount of time for the people to give some consideration to the proposal and hold a meeting subsequently at which the following should happen:
(a)	the members of the land owning group should announce their decision on whether or not to incorporate;
(b)	if the decision is in favour of incorporation there should be an immediate discussion of :
(i)	the propose ILG’s constitution, what should be in it upon a careful consideration of the requirements of the ILG Act and the pro forma constitution in Schedule 7 of the Act, its drafting and when it can be presented for consideration and adoption;
(ii)	List of properties;
(iii)	List of membership and securing of birth certificates;
(iv)	map or sketch of the land to be the subject of the incorporation; and
(v)	consideration, seeking and securing consent and appointment of the propose ILG’s proposed dispute settlement authority; and 
(vi) 	all and other matters that should be included in the application for incorporation;

(3)	There should be a further allowance of sufficient time to pass since the last meeting for the proposed ILG’s constitution to be draft and presented to the general membership at the next meeting.  At such a meeting:
(a)	the full membership of the group should be present and confirmed;
(b) 	the local village court officials and the ward councillor and if available, the district administrator and the Registrar of ILGs or their representatives should also be present to witness the proceedings;
	the draft constitutions should get presented here and voted upon;
(d)	if the constitution is adopted, election of the members of the management committee and any other committees provided for under the constitution together with the dispute settlement authority should get elected into office at this stage; and
	at this meeting, all the necessary documentation should be completed ready for lodgement, including birth certificates of all the members of the group;

(4)	The next meeting should be one held after an application has been lodged and the Registrar has published and given notice of the application. If the Registrar either in person or his representative was present and witnessed all of the forgoing, the rest of the process should be straight forward and incorporation should be the next straight forward and uneventful process.  If however, the Registrar or his representative did not attend and witness the foregoing meetings, it should be his duty to ensure the application meets all of the requirements of the Act. Then if he is satisfied that the requirements of the Act appear to have been met, publish a notice of the application and ensure that the notice does reach the people in their local setting. The notice should trigger a meeting of the members of the group and the neighbours.  At this meeting the people should be fully informed of the application and what it means.  The Registrar should attend such a meeting personally or through a representative. If those responsible for the formation and lodging the application for incorporation took the earlier steps in accordance with the foregoing, the people will readily endorse the application.  However, if the opposite was the case, with only one or two persons advancing their own interest, there would be strong objection; and
 
(5)	If steps (1) to (4) are completed in favour of incorporating a customary land group, the next meeting will be one conducted within three months after the issuance of a certificate of recognition or incorporation. Indeed such a meeting is required by s. 14A (1) of the ILG Act. At this meeting amongst other business, the chair of the management committee would report on the formal incorporation of the ILG with its certificate, account for all actions and expenditure out laid to secure the incorporation and inform what if any liabilities have been incurred in the process.  At this meeting, the leadership of the ILG should ensure the records are updated and properly kept.  Further, at this meeting the ILG’s business plan with how it will be implemented should be outlined for the rest of the year and into the future.

40.	The resource extraction industry or sector and other developments involving large customary land which has and is giving rise to many fraudulent ILGs also presents an excellent opportunity to get both the process and outcome right through the kind of open and transparent process outlined above. Both the State through the office of the Registrar and a developer need to appreciate the problem that exists and make it their number one priority to get the customary land owners properly identified and organised in accordance with the process just described above before any major development can take place on any customary land.  In this way, as I said in my decision in the P’Nyang case, the developers will be able to secure their social licenses to operate and thereby avoid project security risks.   This I noted was “a critical prerequisite for any project especially, in the natural resources extractive industry.” Given that, many international businesses accept the need to obtain their “social licenses” and keep them current during the currency of their projects.  

41.	In the oil and gas sector, the OGA makes it a condition precedent by s. 47 for a developer to do just that.  At paragraph 48 of my decision in the P’Nyang case, I highlighted the requirements of s. 47 in these terms:

“Clearly, subsections (1), (2) and (3) stipulate in no uncertain terms that a SMLIS [social mapping and landowner identification studies] is a condition for each of the three licenses. The rest of the provisions of s. 47 make it clear that, the requirement for a SMLIS is a condition precedent to any of the three licenses, PPL, PRL and PDL and land to be taken up by pipelines and facilities. Subsection (4) requires at the commencement of these licenses, namely at the PPL stage, which would be the first ever time anyone interested in a petroleum exploration and eventual development enters any customary land, to meet the requirement for a SMLIS. Subsection (5A) makes it clear that any application for a variation of any of the licenses must be conditional on a SMLIS. Hence, in my view, the requirement for a SMLIS is a condition precedent to any petroleum license under the OGA, their extension or any variation. This is a necessary condition precedent because it is through this process the real customary landowners and those who are by custom connected to them get identified for all purposes under the OGA. This necessity is dictated by a need for the customary landowners on whose land the development is going to take place giving their permission to prospectors and developers to enter their customary land, consider and approve any petroleum project, participate at the appropriate levels, including a development forum and sign petroleum development agreements and participate in benefit sharing with other landowners and the State.”

42.	Sections 169 (2) (b) and 176 (3) (f) of the OGA specifically requires the landowners to receive their equity and royalties benefits through incorporated ILGs.  Given failures by the developer and the State in not ensuring a proper and due discharge of the obligations imposed on the developer under s. 47 of the OGA, no proper ILG’s in the way I have described in the foregoing have been incorporated for PNG LNG Project. This is why the landowner identification and proper formation of ILGs for the purpose of s. 169 (2) (b) and 176 (3) (f) of the OGA remains outstanding.  

43.	A court ordered mediation process headed by myself, which included the Registrar of ILGs as part of the State and hence mediation team began to properly identify the landowning clans and take the necessary steps to have their ILGs incorporated through a much published and welcomed, open, transparent and public process.  This saw well over 100 plus clans in Angore PDL8 been publically verified and approved using the process steps 1 to 3 outlined paragraph 39 above, with steps 4 and 5 yet to be completed.  Through these process, the full membership of each of the clans, with their tribes attended in large numbers and gave their free and informed consent for their own and their neighbouring clans proceeding to ILG incorporations. This were witnessed by the relevant local leadership at all levels and the mediation team. They have been prepared and cleared to proceed to their respective ILG incorporations by completing steps 4 and 5.  Others who claimed to be clans according to lists produced by the Department of Petroleum and Energy got eliminated by reason of being publically objected on the basis of them being unrecognized landowning clans in the area. 

44.	Unfortunately, the above intervention has been delayed and is on hold due to the State failing to fund the process to continue and have it completed. Meanwhile, the LNG project is now in full production. The developer and the State are receiving their share of the benefits of the project while the landowners are yet to see their equity and royalties reach them through their properly incorporated ILGs.  This immediately highlights the unfairness in the whole of the project and forming the basis for the many LNG related cases filed in Court and is continuing to be one of the major problems that needs to be satisfactorily attended to and resolved properly.  Without sorting out this problem, Exxon Mobile, the developer of the PNG LNG Project, tried to bring on the P’Nyang gas fields as an extension of the PNG LNG Project.  The State and the local customary landowners objected on the basis of s. 47 of the OGA and the requirements of the OGA not being met. In the circumstances, I granted an injunction until those requirements are fully meet and the Supreme Court has determined a number of Constitutional questions I referred to it.

45.	This issue of correctly identifying the landowners and properly organising them into properly incorporated ILGs is not restricted to the PNG LNG project. Issues surrounding SABLs and logging concessions and other transactions involving customary land are areas in which the need to properly and correctly identify and organise customary landowners and land groups into ILGs is also pronounced.  There is a complete lack of a proper practical process such as the one I highlighted above through which the true landowner’s free and informed consent are sought and obtained in exchange for valuable consideration or benefits flowing to them.  There are good statutory process like the ones discussed above but the problem is a practical one. This goes into the need to ensuring and indeed making sure there is due compliance and meeting of the requirements of the law to prevent the kinds of sad realities I have earlier described. Given this position, I suggest strongly that, the developers who enter customary land with the support of the State and the State who have the means, resources and ability and want to access the peoples resources must first ensure that the landowners are properly identified and organised into proper ILGs, through a fair, open, transparent and public process as the one described above and where the correct landowning clans are identified and organised in properly incorporated ILGs that are truly for and by the members of each of the clans or land groups.  A failure in this respect would be asking for the same kind of fate that followed in the Leo Maniwa & Ors. v. Aron Malijiwi & Ors  (supra) case, a nullification of developments or projects which could prove too costly for developers and the State.

46.	The process suggested here should prove to be a straight forward and a very effective process as the people will be able tell the truth about themselves in each other’s presence.  If there are no disputes it would be a matter of formality to go through the process and have the ILGs incorporated.  If however, there is a dispute, that dispute will have to be resolved first before the incorporation process can be concluded.  Any such dispute could be resolved there and then through the direct discussions and or negotiations of the landowners or failing that through mediation facilitated by properly trained, accredited and experienced mediator conversant in the local language and cultures and traditions of the local people first and only as a very last resort, through a formal adjudicative process.  The State and a developer should play a more proactive role in the mediation process and provide the kind of support it needs to properly organise the landowners into ILGs in order their project and the investments they make a protected up to its full duration. This would be far more effective, than the current practice.  The current practice sees the State and the developers leaving it to the ill equipped, mostly illiterate and prepared customary landowners to fend for themselves with the Registrar acting only on the information provided by people claiming to be landowners without independently ensuring that the application is genuine and does have the support of all members of the group, the neighbouring clans, the relevant leaderships at all levels and real opportunity has been given to the people to be informed properly and fully, based on which, they have given their free and informed consent.  Also, this would help eliminate fraudsters and thieves from gaining at the expenses of the real and genuine landowners.

47.	It should follow therefore that, where there is a challenge on the validity of an incorporated ILG, it should withstand the challenge if it went through a public process as described above. The ILG’s records upon production should be able to speak for itself and if need be, readily verified and confirmed by the general membership of the land group, the community and leadership at the various levels given their involvement or witnessing the process.  The records should consist of the minutes of the relevant meetings, other documentations prepared and settled at the various stages, lodgement of the relevant documentations with the Registrar up to the minutes of the meetings since incorporation to the date of the challenge.  The challenge would trigger a general meeting of the ILG at which the people would be informed of the challenge and they would consider and pass an appropriate resolution on how to meet the challenge, including the engagement of a lawyer to take up their case.  Production of the meeting minutes with the resolution would assist in the resolution of challenge.  If however, an ILG has been incorporate in secret and or by a few people using the name of the relevant land group and hence not properly incorporated for and by the people with their free and informed constant, it would not be able to produce such records and or documentation.  Consequently, it would not be able to withstand the challenge.

(v) 	Present Case

48.	In the present case, as noted, the State acquired the Land portions 88C and 89C compulsorily.  Thereafter the land became State land.  Evidence before the Court suggests the landowners took no issue with the acquisition and freely consented in exchange for government services. There is nothing in the evidence to suggest that the requirements under s. 13 of the Lands Act 1996 or its then equivalent at the time of the acquisition were not met.   Hence, through that process, it is clear, the State ascertained the owners of the land at the relevant time. If there was any dispute it would have been the subject of proceedings under s. 9 of the Lands Act either before the Land Titles Commission or the Local Land Court. There is no evidence of any such proceeding. All appears to have proceeded well until 2012 when the State decided to pay compensation to the then customary land owners.  That could have proceeded smoothly based on the investigations at the time of the acquisition which would confirm the owners of the Land.  Payments could have rightly gone to the persons who were then identified as owners as at the time of acquisition.

49.	However, it became a problem when the First Defendants incorporated their respective Ere and Hewa ILGs. As Heto Arepa deposes to at paragraph 3 of his affidavit of 27th September 2015, the ILGs were “formed for the purposes of pursuing our claim for compensation against the Department of Lands.” Neither Arepa nor his friend Mr. Kepaya Bone have provided any details with evidence of how they went about forming and having the ILGs incorporated.   In addition to other matters I will shortly point out, they have not answered one critical question. The question is, how did they manage to get the ILGs incorporated over land that is already State land and no longer available for any customary group to use, let alone use it for an ILG incorporation. At the least, the First Defendants should have answered this question and the other questions that follow:

(1)	How many meetings were held by the clan or land groups prior to the formal incorporation of the ILGs?
(2)	How many meetings have been held to date since the incorporation of the ILGs?
(3)	Where and when did each of these meetings take place?
(4)	When and how each of the members of the clans were informed of each of the proposed meetings?
(5)	Who and how many members of the clans attended at each of the meetings?
(6)	Is there a membership list and if so, when was it first created and when was it last updated with the knowledge and or involvement of each of the members of the clans?
 (7)	What was the agenda for each of the meetings and what were the resolution or decisions arrived at each meeting?
(8)	Who organised, chaired and facilitated at each of these meetings?
(9)	Who drafted the respective constitutions, when were their drafts circulated, at which meeting were they debated or considered and a resolution was passed to adopt them?
(10)	When, where and at which meeting of the ILGs’ were their respective leaders elected into office with records of who nominated and seconded each of them and what were the respective outcomes for each of the elections?
(11)	At which meeting was the proposed dispute settlement authority considered, who nominated and approached them, when did the dispute settlement authority communicate his or their acceptance, and how was that done?
(12)	Who took minutes of each of the meetings and are they readily available to be produced in evidence?
(13)	Who completed all of the relevant documentation for incorporation purposes, lodge them for registration, where, when and how?
(14)	When were the respective notices of the respective applications for incorporation published in the National Gazette, when were they served on the relevant village court, local level government and the district administrator?
(15)	When and how were the members of the Ere and Hewa clans and the neighbouring clans or persons who stand to be affected or might have an interest in the incorporation informed of the intention to have the ILGs incorporated?
(16)	Provided the general membership of the clans and other persons having an interest or those who stood to be affected were informed of the intention to incorporate the ILGs:
(a)	how were their responses sought and obtained?
(b)	were the responses unanimously in favour of incorporation; or
(c)  if there were any disputes how were they resolved;
(d)	when and where was that done and recorded; and
(e)	who facilitated the meeting or discussions or the process that led to the resolution of the disputes?
 (17)	How were responses of the general membership of the clans, the neighbours and others having an interest in the incorporation or standing to be affected communicated to the Registrar of the ILG? 
(18)	When did the ILGs receive their respective ILG certificates of recognition, when and where were the first general meetings of the ILGs conducted, how many members attended and what were the agenda for the meeting? 

50.	Most of these questions need to be answered with reference to and supported by appropriate documentary evidence.  These should have consisted of the minutes of each meeting, copies of all documents created or completed for incorporation purposes and other evidence.  The only documentary evidence in Court is a copy of a certificate of incorporation of the Ere ILG issued on 19th November 2014, which is annexed to an affidavit by an Eto Arapa (not clear if he is one and the same person as Heto Arepa) sworn on 23rd and filed on 24th March 2015.  The Plaintiffs claim that the ILG incorporations where done in secrete or at least without the knowledge and involvement of the respective general clans’ membership and without following the process provided for under the ILG Act.  This left out the correct landowners who gave away their land to the State many years back. Hence, when they learned of the ILGs being incorporated, they made representations to the Department of Lands and eventually issued this proceeding.  On these facts or the lack thereof, it appeared to me the incorporation of the two ILGs were a fraud committed against the Ere and Hewa clans.  If the incorporations were not a fraud, the First Defendants could have done two things readily.  First, they could have readily answered all of the questions listed in paragraph 49 and disclosed a full chronology of events with who did what, when, where and how with a production of the relevant minutes of the various meetings, membership lists and all the other relevant paper trail that could have spoken  for themselves.  Secondly, they could have welcomed the opportunity to go back to the people and get their re-endorsement and put the Plaintiffs’ challenge as presented in this proceeding to a total rest.  Instead, of conducting accordingly, the First Defendants came up with all sorts of arguments to avoid going back to the people. 

51.	Faced with these facts or lack thereof and the First Defendants’ attitudes, the Court had to make a decision as to which process, the judicial determinative or the mediation process could better resolve this matter fully and finally.   I was convinced mediation offered a better option and opportunity for a number of reasons.  Firstly, I took into account the First Defendants’ argument as to this Court’s jurisdiction based on their argument that they have raised the customary land ownership issue, which prevents this Court from assuming jurisdiction and then referring the matter to mediation. Legally, they are correct in that argument.  However, on the particular circumstances of this case, no customary landownership issue is presented. This is because the issue was resolved by the State as briefly discussed in paragraph 48 above. The parties are not in Court because the First Defendants are claiming ownership over the Land in question and are taking steps to take the Land away from the Plaintiffs.  Instead, as already noted, the Land has already passed onto the State and is no longer available for any person to claim ownership and other interest over it and seek to incorporate an ILG.  The parties are in Court because the First Defendants have had ILGs incorporated. These incorporations according to the Plaintiffs were done in secrete by the First Defendants who are resident in Port Moresby without any knowledge, meaningful involvement, free and informed consent and approval of the undisputed original owners of the Land who are all in the Hela Province. The incorporations were for the purposes of pursuing and receiving the compensation payments from the State, something Heto Arepa, one of the First Defendant admits in his affidavit.  If there is any dispute as to who were the traditional owners of the land, the States record on that as at the time of the acquisition will help answer that question.  Hence, it made sense to have the matter referred to mediation.

52.	Also, I applied the views I expressed in my dissenting judgment in the matter of John Kotape & Ors v. McConnell Dowell Construction PNG Ltd & Ors. There, I expressed the view that the Court should be slow and indeed refrain from acting merely on an issue of customary landownership raised in a defendant’ defence.  That was based on the law on proper pleadings, expedited resolution of disputes through mediation and other forms of ADR and the principles governing summary judgment as discussed and applied in a number of National and Supreme Court decisions. I expressed the view that, a call for summary determination must be clearly and properly established by a careful consideration of the principles governing summary judgments and clearly uncontested facts before final decision that such an issue does exist can be arrived at and the issue determined summarily.  If however, the facts are in dispute that would warrant a trial. At the trial, the disputed facts will be tested and tried and ultimately the Court will make a decision on which version of the disputed facts it will accept and act upon.  Once, the Court is able to come to a decision on the contested facts, only then will the Court be correctly in a position to make a decision on the contested facts and issues before the Court. This was necessary to avoid abusing the Court’s process to take a matter out of the National Court when in fact no such issue might exist. In the case cited, the defendants raised a customary land ownership issue and filed affidavit evidence which were clearly contested. I was and continue to hold the view that, it is not sufficient that the issue is formally raised in the defence. Instead, in addition to sufficiently pleading the issue, critically, there must be uncontested facts supporting the defence or the plaintiff concedes to allow for a summary determination. 

53.	In this case, the First Defendant’s raised the issue without any clear and uncontested evidence that they and their clans are the owners of the Land and that they have incorporated the ILGs following the due process provided for in the ILG Act.  In any case, the affidavits they filed are seriously contested.  Hence a sure, cheaper and expedited process to be employed to enable the parties to consider the issues presented in this case, including the landownership issue, if indeed it is an issue as matter of fact, was to have them referred to mediation for the additional reasons I will be shortly giving.  If through that process, it becomes clear that ownership of the Land is indeed the real issue between the parties, the parties will have either of two options to go for.  One option would be for them to discuss the issue and have it resolved. The likelihood of that happening was almost likely, especially with the assistance of the Court appointed mediator Mr. Mark Pupaka who is eminently qualified and experience as a then Deputy Chief Magistrate in charge of customary land disputes and appropriately trained and experience mediator.  He also assisted a large number of customary land owning groups to resolved disputes under the Land Disputes Settlement Act (Chp.45) (LDSA) and other disputes on referral from the National Court.  The second option was for the parties to agree to refer the dispute for a resolution under the LDSA.

54.	Speaking of the process under the LDSA, I was also mindful of the fact that, all is not that well with that process. In some parts of the country, the system is working, while in others, the process or the system has either been formally suspended as in the case of Enga Province or they are not functioning at all as a matter of fact. Evidence before the Court suggest the Land Court system in the Hela Province is dysfunctional. This in my view was confirmed by the First Defendants failing to issue Local Land Court proceedings out of Tari despite repeat orders of this Court and extensions of time for them to do so. I appreciate that the First Defendants produce some evidence from the District Court in Tari claiming some persons who are purportedly land mediators will mediate in this case.  Unfortunately, in the absence of clear evidence of the relevant gazettal establishing the Local Land Court in the Hela Province and the appointment of land mediators these were mere claims.  Besides, the Courts orders was for actual commence of proceedings in the relevant Local Land Court and not a mediation process to be facilitate by persons claiming to be mediators, independent of any formal Local Land Court proceeding. 

55.	Further, as the National and Supreme Courts have repeatedly noted, there are issues of integrity and the process failing to work as well as it should.  There are too many review applications ending up in the National Court and from there even to the Supreme Court resulting in lengthy delays in resolving the real issues in a dispute. A recent case on point is Nathan Koti & Ors v.David Susuame & Ors (supra).  There, in a bid to find a lasting solution, his Honour Cannings J., took an unconventional approach of referring the matter for resolution by mediation after the parties had spent 20 years in litigation and still not able to find a lasting solution. At mediation, appreciating that this concerned customary land related issues, parties who had an interest and or stood to be affected but not named in the formal Court proceedings were allowed to fully participate. That resulted in an agreement by all the parties except the plaintiff who went back to Court and took issue amongst others with the mediation process allowing none parties to participate in the mediation.  His Honour appropriate responded:

“I acknowledge the validity of the points made by Mr Pipike, on behalf of Mr Koti. The mediation followed an unconventional course in that people who were not parties to the court proceedings were allowed to participate in the mediation, to the extent that they became parties to the mediated agreement. However, it appears that this was done for very good reasons. Mediation of the underlying disputes over customary ownership of the subject land started in the mid-1990s. Litigation has continued in multiple proceedings before the Local Land Court, the Provincial Land Court and the National Court since 2002. Justice Kandakasi evidently saw the opportunity to get this long-running controversy resolved finally, by consulting and engaging in discussion with people who, though technically not parties to the judicial review proceedings, had a legitimate interest in the real controversies and disputes underlying the proceedings. It seems that Mr Koti was the only party to the judicial review proceedings who disagreed with that unconventional approach.
								(Underlining supplied)

56.	Eventually, His Honour decided to uphold the mediation agreement. In so doing His Honour took comfort in the provisions of s. 155 (4) of the Constitution and reasoned:

“22.	I am obliged to depart from the conventional approach to making orders in judicial review and to make a decision that borders on determining questions of ownership of customary land as there are exceptional circumstances in this particular case. The disputes underlying the judicial review proceedings have continued on a course of mediation and litigation for more than 20 years. The mediated agreement represents a consensus of all but one of the parties to the judicial review proceedings and other persons with a legitimate interest in the underlying disputes.

23.	It is necessary to do justice in the circumstances of this particular case to order, without further hearing, that the mediated agreement be given effect as an order of the National Court, and that the judicial review proceedings be determined accordingly.”
								(Underlining supplied)
	
57.	Apply that decision to the present case, I was of the view that the 20 years spent in litigation in the Nathan Koti matter without reaching any lasting outcome until mediation was likely to be repeated or if not, worsened in view of the system being dysfunctional in the Hela Province.  In the circumstances, sending the matter to mediation offered a better opportunity for the parties to have this matter resolved even if the ownership issue was real and needed to be resolved or failing resolution return to the Court with a clearly identified set of issues and how they should be attended to and resolved.  Accordingly, this formed an integral part of the reasons to have the matter referred to mediation.    

58.	The second main reason for the Court referring the matter to mediation was this.  Mediation comes with a process that would be taken home to the Hela Province where the general membership of the Ere and Hewa clans, their tribe and their neighbouring clans are located. This would give an opportunity for the whole membership of the clans in whose names the ILGs were incorporated and their neighbours with their leadership to be informed and be involved in the resolution of the real issues presented in this case. Through this process, the people will thus be given the opportunity to be informed of these proceeding, the issues presented and an opportunity for those who have an interest and stand to be affected by the ILG incorporations to clearly indicate their positions and help resolve the matter.   

59.	On the other hand, in the Court process, this will not happen and the people will be denied their right to be heard before any final decision affecting them is made. The Court will only be able to receive evidence from witnesses through affidavits or other sworn testimony from a very few people far removed from the scrutiny of the majority of the people who have an interest or stand to be affected  as to the accuracy and truthfulness of the evidence that might thus be given.   In my limited experience and exposure as a judge and before that as a lawyer, I have witnessed many instances in which witnesses have lied under oath. This is the case because, in Court as a matter of procedural law, the opponent’s witnesses are precluded from sitting in and hearing the testimony of his or her opponent. This creates an excellent opportunity for people who are inclined to telling lies to do so with the assurance that there is no one in Court possessed with the truth to scrutinize them and ensure they are telling only the truth. Presently this is happening more frequently than not. A number of lawyers are readily and easily filing affidavits for clients which do not necessarily contain the true facts.    

60.	In mediation however, parties tell it as it is in each other’s presence.  Telling a lie does not go down well because both sides know the truth about the matter and the entirety of the clan membership and neighbours would be there by the numbers to ensure no lie is told and sustained. In a case like incorporating an ILG which affects more than just one or two people or a family and one which is intended to be a public process as outlined above, no one can lie about the facts going into the ILG’s formation and incorporation in the event of a dispute. Hence, as in this case, if the incorporations of the ILGs were for the benefit of the whole membership of the respective clans, done for and by the whole membership of the respective clans with their meaningful involvement and with their free and informed consent as well as the endorsement and or approval of their neighbouring clans in terms of registering no dispute, this will easily and readily be established and reaffirmed in the scrutiny and witness of themselves, the mediators and anyone witnessing the process.   If however, the opposite was the case, the people will also be able to freely indicate their position.  For this reason, it also made sense to refer the matter to mediation to be conducted on location.

61.	Thirdly, unlike the Court process, the mediation process comes with more focus on the future rather than an exercise in fault finding. This is achieved through enabling the parties to accept what has happened, forgive those who may have wronged them and move forward from there into discussing and crafting out a better future. That is possible through respectful and more informed communication between the parties facilitated by an experienced accredited mediator. The mediator through the process enables the parties to jointly explore options around satisfactory and effective resolution of their dispute and map out a better and brighter future for themselves.  The process enables the parties to both own the problem and the solutions and stay committed to their obligations as opposed to Court orders which, in some instances, are breached and enforcement is a problem, with cases arising out of rural settings doubly harder to monitor and ensure compliance.  Thus, in this case, I was of the view that, if the ILGs were indeed not properly formed and incorporated in accordance with the law as outlined above for and by the people with their meaningful involvement and with their free and informed consent, they will have the opportunity to have the ILGs properly reorganised, this time with the help of the mediator experienced in the task and the lawyers and other able members of the clans. At the same time, I was conscious of the fact that, having a properly incorporated ILG is a requirement to receiving payments for and on behalf of customary groups especially from the State and developers in order that the receipt and application of the funds received are properly accounted for.  The mediation process will be able to help the clans to meet the requirements of the law and have their ILGs properly re-organised or re-incorporated or incorporate completely new ILGs in order for them to receive their compensation money.  Certainly, this could not happen in Court.  In Court, if it turns out that the ILG’s were not properly incorporated, the Court will simply declare the incorporations null and void and leave it at that.  The people will then be left with the challenge of having the ILGs properly incorporated on their own resulting in more time and costs outlay.  This reason made additional sense to have the matter referred for resolution by mediation.

62.	Fourthly, I have already referred a number of similar cases to mediation and they resulted in some very good settlements which could not happen in Court.   Through these experiences, I have learned an important lesson. Persons who mean well and genuinely incorporated ILGs for their people in an honest, fair and transparent manner with the general membership’s knowledge, meaningful involvement and free and informed consent in the witness and with the endorsement of their neighbours, readily accepted the slightest suggestion of taking the matter back to the people in their own locality.  The opposite also turned out to be the case for persons who did the opposite of that.  Persons who incorporate ILGs without the knowledge, the meaningful involvement and the free and informed consent of the people for those individuals personal benefit to the exclusion of the entire clan’s or tribe’s membership, strongly oppose mediation and would say and do anything to ensure the matter does not get referred to the people for the people to have their say.  For they know that, they will be found out and they will not do well in the eyes of the people.  I saw this was being played out by the First Defendants here.  They even raise the issue of notice under s. 5 of the Claims by and Against the State Act while the State is a party and has not taken that issue itself.  The State remains supportive of the matter being resolved by mediation.  In the circumstances, I formed the view that, the kind of conduct displayed by the First Defendants was consistent with persons wanting to avoid the scrutiny of their own people and account to them for their actions.  This factor made referring the matter to mediation to be conducted at village or at a location where the entire or majority of the two clans’ members could easily attend and meaningfully participate with the process facilitated by an well qualified and experienced mediator who has good working knowledge of customary land rights and interests and the proper formation of ILGs more attractive. Hence, this factor formed part of the reasons why mediation was ordered.

Relevant Law

63.	The law on bad faith at mediation is clear.  Once the Court decides to order mediation and makes the appropriate orders, compliance of those orders is what is required next. There are number of judgments on this point.  This includes amongst others, my decisions in Koitaki Plantations v. Charton,Awesa v. PNG Power, Wantok Gaming Systems Ltd v. National Gaming Control Board and Roger Meckpi v. Fallon and Dekenai Constructions Ltd. In these judgments, I went to some length in discussing the development, promotion and use of ADR and mediation for an expedited, efficient and effective resolution of disputes. Also, in these judgments, I highlighted the reasons why the formal courts and governments worldwide are promoting and encouraging the use of mediation.  Further, I discussed in some detail the duties and responsibilities of parties and their lawyers once an order for mediation is made.  Thereafter, I proceeded to provide an answer to the important question of what amounts to “bad faith” which gave rise to those judgments.  I answered that question in all of these judgments in the same way.  In the process, I pointed out that an absence of any of the following list of behaviours would lead to a finding of a party acting in “bad faith”:

“(1)	Complying with the various legislative provisions and other rules, standing orders or practice directions’ or provisions that govern mediation;
(2)	Complying with orders referring a matter to mediation;
(3)	Personally attending (excluding attendance by telephone) at the mediation by all persons who are fully authorized to settle the dispute, 
(4)	Preparing 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)	Participating in meaningful discussions with the mediator and all other participants during the mediation;
(6)	Acting in accordance with all contractual terms regarding mediation, the parties may have agreed to;
(7)	Following 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 discussions 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)	Refraining from filing any new motions until the conclusion of the mediation, in pending lawsuits.”

64.	I also pointed out that, where corporations are involved, their servants and agents should:

“(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 require 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.” 

65.	Finally, turning to the question of appropriate penalties or consequences for any breach of the requirements for “good faith” at mediation, I noted that the starting point is r.10 (7) of the ADR Rules.  This provision stipulates the kinds of penalties the Court could impose against a party that is guilty of “bad faith”.   I have expressed the view that this vests in the Court a “wide discretion or power to make such orders as it may think appropriate in the proceedings once a case of ‘bad faith’ is made out against a party.”  Further, I noted that, in so doing, the rule was merely restating and reinforcing a power the Court already has. It would follow therefore that, a case of “bad faith” could be met by any one or more of the following orders depending on the seriousness of the conduct and whether the conduct is deliberate or inadvertent:

“(a)	dismissal of the claim;
(b)	permanent stay of the claim; or
(c)	a stay of the claim pending a meeting of certain conditions; or 
(d)	a strike out of a defence and entry of judgment; and or
(e)	order costs.

... Sanctions under (a) - (c) could be imposed in appropriate cases, if the defaulting party is the plaintiff or a cross claimant. Obviously, the sanction under (d) could be imposed against a defendant or a cross-defendant.  Sanctions under (a) and (d) could be considered drastic. However, if the circumstances leading to a finding of “bad faith” is serious, such sanctions might very well be called for and warranted, when considered in the light of the kind of sanctions that could be and are being imposed for contempt of court or for breach of court orders.  The final possible sanction of costs could be either on a solicitor/client or party/party basis. Such a sanction could be in addition to any of the sanctions under (a) - (d).  If possible, the court could at the time of the order, fix the actual amount of costs payable or allow for taxation.”

66.	Applying the principles outlined above, I found in Koitaki Plantations v. Charlton (supra); Awesa v. PNG Power (supra); Wantok Gaming Systems Ltd v. National Gaming Control Board (supra) and Roger Meckpi v. Fallon and Dekenai Constructions Ltd (supra) cases, a complete failure to discharge the kinds of duties listed at paragraph 63 of this judgment.

67.	In all these cases, I found these failures seriously impeded the Court ordered mediations from proceeding. That denied the parties an opportunity to resolve the respective matters and failing that, enable the parties with the assistance of the mediators to identify the existence, if any, of a serious and meritorious issue that was inappropriate for resolution by mediation and warranted a judicial consideration and determination as specified in my decision in Abel Constructions Ltd v. W.R. Carpenter (PNG) Ltd.  I also pointed out that, once a Court decides to refer a matter to mediation it means no issue warranting judicial consideration and determination is presented. This necessarily imposes an obligation on the parties to use their best efforts in good faith to have the matter resolved.  A failure to do so, constitutes contempt of Court which may be meet by any of the orders the Court can make under r.10 (7) of the ADR Rules apart from the traditional penalties for contempt of court.
 
68.	Further, I found the Plaintiffs in the first two cases and the Defendants in the last two cases that:

(a)	they failed to demonstrate to the Court’s satisfaction that there existed in their respective cases, the kind of impediment and or type of issues discussed above;
(b)	they conducted in a way that was contemptuous of the orders for mediation;
(c)	their conducts ran against the grain of the various legislative, judicial and learned publications, encouraging and supporting the use of mediation to resolve human conflicts;
(d)	their respective conducts forced the other parties, the Court and the mediator to waste their time, energy and effort in arriving at the decision to have the matter referred to mediation and setting aside time and generally preparing for it; and
(e)	save only to point out that their decisions were not to settle the matter and hence not to give mediation a fair chance, they failed to provide any good reason for taking that position.

69.	In those circumstances, I decided in Koitaki Plantations case that the most appropriate sanction would be an order for a dismissal of the case.  Accordingly, I ordered a dismissal of Koitaki Plantations’ claim and ordered a strike out of its defence with judgment entered against it on a cross claim by the defendants.  In making the second part of the order, I noted that, the case concerned a simple supply of goods contract, namely live animals, a claim of none payment for them in the plaintiff’s claims and in the defence and cross-claim, a claim of a failure to supply the animals and or an over payment for them.  I was of the view that, this presented no meritorious issue that was beyond the reach of mediation and resolution by the parties.  All that the parties had to do was to sit down with the facilitation of a mediator at mediation and settle that claim.  At mediation they would have gone through the various and relevant purchase orders, delivery dockets, invoices, payment slips and evidence of payments and settle the claim after establishing the correct records of what happened in the various transactions. 

70.	In the Alex Awesa case, I arrived at a similar decision and ordered judgment for the plaintiff with damages to be assessed as they were not liquidated. I then ordered the damages to be settled through further mediation.  Costs were ordered against the party acting in bad faith, PNG Power Ltd.  

71.	In Wantok Gaming Systems Ltd case, after considering all the arguments and evidence put before me as well as my earlier decisions, I concluded unlike the defendant in the Alex Awesa case, which was able to point out at least an issue about interpreting a particular statute, there was no mention of any issue that warranted trial being pointed out or identified by the Defendant. I also expressed the view that, if the parties attended mediation in good faith and were not able to resolve their dispute despite their best efforts, they have the duty under Rule 5(2) of the ADR Rules to “identify and limit the real and meritorious issues in the proceedings that warrant judicial consideration and determination” and reach agreement on how to conduct litigation over those issues. By choosing not to go to mediation at the instigation of the Gaming Board, the parties failed to discharge that duty. This, I found was serious because, when the Court decided to have the matter referred to mediation, it was of the view that, no issue warranting a court hearing and determination was presented.  A review of that position could only come after the parties tried their very best to find a solution to their dispute and in the process discover an issue of the kind that is inappropriate for mediation as per the list provided in the Able Construction Ltd case. In these circumstances, I considered ordering the parties to return to mediation and have the matter resolved was appropriate. Accordingly, I referred the matter back to mediation for the second time at the National Gaming Board’s costs on account of its bad faith conduct.  Mediation did take place with certain offers being communicated to and from the parties. Unfortunately, these did not result in any settlement.  However, upon returned of the matter, the Court on their request gave the parties further opportunity to settle the matter out of Court and they did.

72.	In Roger Meckpi v. Luke Fallon and Dekenai Constructions Ltd (supra), as I noted at paragraphs 20 of that judgment, the Defendants against whom the mediator issued a bad faith certificate and their lawyer: 

 “(a)	failed to engage in meaningful out of court settlement discussions;
(b)	failed to comply with Court orders and directions for direct settlement discussions;
(c)	being discourteous to Roger and not honouring counsel’s indication of wanting to have this matter discussed and resolved;
(d)	despite repeated adjournments and opportunities given to the Defendants both by the Court, the mediators and Roger for them to attend and participate meaningfully in the Court ordered mediation they failed to turn up on each of the appointed dates; and
(e)	failed to give any explanation at all for their failure to engage in settlement discussions, failure to turn up for mediation on the various appointed dates and their failure to participate at mediation in good faith.”

73.	At paragraph 21, I found the Defendants conducts were consistent with their attitude from earlier on in the proceedings, which saw repeated failed applications for dismissal, and various other interlocutory and interrogatory processes, some of which were without good reason and unnecessary.  Those unnecessary actions caused more than a decade in delays in having the matter disposed of promptly.  I found also that, the Defendants conduct breached a number of their respective duties.  They breach their duties in terms of the matters set out at paragraph 63 in this judgment. 

74.	As against Mr. Peri the Court found he failed in his professional duties.  As the Court noted, the relevant duties come at three stages of a matter being referred to mediation, immediately post a mediation order and immediately post a bad faith certificate.  The specific duties were outlined earlier in Alex Awesa v. PNG Power Limited (supra).  At the first stage, the following kinds of advice should be given to clients by their lawyers:

“(1)	a statement on the nature of the case outlining the kinds of issues presented, and an outline of the correct, relevant and applicable legal principles; 
(2)	then of the issues presented, whether any or all of them presented any question that was inappropriate for mediation;
(3)	that should be followed by an outline of the kind of processes available namely, direct negotiations and failing any resolution, mediation and failing any resolution through that, the formal court process with advice on the advantages and disadvantages of employing any of those processes;
(4)	in the context of item (3) there should be an outline of the party’s worse alternative to a negotiated outcome (WATNO) or agreement (WATNA) and the party’s best alternative to a negotiated outcome (BATNO) or agreement (WATNA).
(5)	if the advice identifies the case as presenting issues inappropriate for mediation, it should also identify the issues, how such issues are presented, seek specific instructions to apply under r. 4 of the ADR Rules to proceed to litigation and thereby take the matter out of the pre-supposed requirement for mediation and outline the kinds of evidence required and who is to depose to them in support of any such application; and
(6)	if the opposite of item (5) was the case, advice should have been provided to that effect and seek appropriate instructions to apply for appropriate orders, prepare for and proceed with mediation once ordered without delay.”

75.	Then at the second stage, the lawyers’ advice should cover the following:

“(1)	the fact that the Court has made an order for mediation with an emphasis on the need to comply with the order and why, including an avoidance of any possible contempt of court charges;
(2)	an outline of the parties duties under r.10 (1) – (6) of the ADR Rules as elaborated and detailed in the case of Hargy Oil Palm and how those duties could be or should be discharged;
(3)	following on from item (1) and (2) above, an outline of the possible consequences that would follow for any noncompliance of the orders and the requirements of the ADR Rules as elaborated and set out in the Koitaki case.
(4)	seeking specific instructions for an unrestricted authority to negotiate and settle on behalf of the company17 but between its WATNO and BATNO, the board or the person with the power to bind the company to be on standby for any further or additional or alternative instructions that might be needed and provide any endorsement or approval that might be required.”

76.	Finally, at the third stage, the lawyers’ advice should cover the following:

“(1)	an outline of what could amount to a reasonable explanation for the conduct leading to the failure of mediation and the issuance of the certificate of ‘bad faith’;
(2)	highlight a need for instructions going into a provision of evidence disclosing a reasonable explanation for the conduct leading to the mediation failing and the eventual issuance of the “bad faith” certificate; 
(3)	where the failure of mediation is due to  an identification of an issue that is inappropriate for mediation to resolve, highlight; (1) the need to demonstrate how that issue could not be identified prior to the order for mediation despite an exercise of due care and attention to do so; (2) how it was revealed after the order for and or during mediation; (3) the need to get the other party and the mediators agreement on such an issue surfacing during mediation; and (4) how it is an issue that is beyond the parties ability to resolve with the mediators help; and
(4)	an outline of what steps the party against whom a “bad faith” certificate was issued took at the mediation to have any factual issue arising in the case resolved, which would clearly be an aspect the parties would be able to achieve, unless there were serious technical facts in issue which are incapable of resolution through any joint appropriate testing, inquiry and or assessment.”

77.	In a number of cases, with the latest being my decision in the Roger Meckpi’s case, I have repeatedly pointed out that, when a case goes back to the Court on a bad faith certificate, lawyers for the parties acting in bad faith must provide evidence of having provided the kind of advice required. This was not done in the PNG Power and Roger Meckpi cases. Consequently, I found in both cases that the respective lawyers failed in their respective duties to appropriately advice at each of the stages their respective clients. In these and other cases, I pointed out further that, when the Court decided in each case to refer the matters to mediation, it was effectively of the view that the “case did not present any issue that warranted only a judicial consideration and determination and therefore presented an inappropriate case for mediation.” That effectively, obligated the parties to:

“fairly and openly discuss the matters of importance and concern to them, then jointly identify their issues, concerns or interests, consider all possible options for a resolution of each of the issues presented and arrive at an outcome that would finally resolve all issues between them.”

78.	In those earlier cases, I considered the evidence then before the Court and found that, instead of taking such steps, the parties against whom bad faith certificates had been issued, took steps unilaterally and failed to take any real and meaningful step to give the Court ordered mediation a real go in good faith. In those circumstances, I considered it appropriate that each of the matters should be referred back to mediation at the defaulting parties’ costs.  

79.	In Roger Meckpi’s case, I found there was a complete lack of evidence of what steps if any, learned counsel for the defendants took to appropriately inform, advice and prepare his clients for the Court ordered mediation to take place on any of the set dates.  Despite changes to the dates for mediation to enable the defendants to attend and participate, they did not make any attempt at all. This deprived the parties of resolving the matter and or failing that, enable them to clearly identify the issues which warranted resolution only by a judicial consideration and determination. Mr. Peri, failed in respect of all of his duties at all stages that call for a considered discharge of his duties and responsibilities.  This directly resulted in the Court ordered mediation not taking place on the dates fixed by the Court or the mediator in consultation with the parties. That led to the issuance of the “bad faith” certificate against the defendants. I then clearly expressed the view that the defendants’ and their lawyers conduct constituted repeated acts of contempt of court without good reason or excuse at the highest. 
 
80.	I went on to find that the kinds of conduct the defendants and their lawyers engaged in that case was far worse than those displayed in the previous cases mentioned and discussed earlier in this judgment.  I also noted that, the case presented no issue of the kinds listed in Abel Constructions Ltd v. W.R. Carpenter (PNG) Ltd or at all that warrants a judicial consideration and determination.  Instead, it was a simple claim for liquidated damages out of a tenancy agreement. In their defence, the defendants amongst others, took issue with Roger owning the property and the lack of a written agreement between the parties.   Based on their claim of Roger not being the owner of the property, the defendants, made repeated applications for a dismissal of the proceedings.  Roger adduced evidence of the defendant’s occupation of the property and their failure to pay agreed rents. The defendants adduced no evidence rebutting Roger’s claim as supported by his evidence.  In the end, all of the defendants’ repeated applications failed and the Court finally ordered the parties to have the proceedings resolved by mediation. I ultimately found that, by the defendants and their lawyer’s conduct, they denied the mediation process from taking place and hence an opportunity for the parties to consider all options and settle the matter without any good basis. In these circumstances, the Court decided to strike out the defendants’ defence and ordered judgment for Mr. Roger Meckpi. 

81.	Also, in the light of the apparent failures of the defendants’ lawyer Mr. Koeya Peri, I gave some serious thought to the need to making orders against him personally.  However in the light of no evidence from the defendants and their earlier sustained but unsuccessful applications against Roger’s claim, the Court decided against making such an order and leave the issue to the defendants and their lawyer to sort out.  This meant that, if the lawyer acted on the defendant’s instructions, the defendants would be responsible for the costs.  If however, the lawyer failed to keep his clients informed of all developments and obligations as they befall on the defendants and failed in his duties to appropriately advice, prepare and take the defendants to the Court ordered mediation appointments, the defendants will be at liberty to seek recovery from their lawyer both the damages and the costs as ordered against them. 

Present case

82.	Turning to the case at hand, the relevant question is what did the parties do with the mediation orders in the present case? This question requires a consideration of what steps the parties took to comply with the orders for mediation and the basis upon which the mediator issued the bad faith certificate.  Relevantly, I note that, as early as 9th March 2015 when this matter first came to the Court, the Court directed parties to have the matter resolved by their direct negotiations. Failing a resolution of the matter by that process, the Court also directed the parties to consider resolving the matter through a number of other ADR processes. That included the possibility of a site visit and an ascertainment from the people by the Court the real issues between the parties, mediation or a referral of the matter to the Local Land Court if indeed there was a customary land ownership issue. The First Defendants failed to take any meaningful step to have this matter resolved in the way directed.  Instead, they insisted on their claim of a customary land ownership issue arising in the proceedings. 

83.	In a bid to test the seriousness of the First Defendants claim, the Court on 9th October 2015, directed the First Defendants to issue Local Land Court proceedings in Tari, Hela Province and have that prosecuted with due diligence.  At the same time, the Court ordered that, if the First Defendants fail to issue such a proceeding, the parties should return to the Court with a draft consent order for mediation. By the time the matter next returned to the Court, the First Defendants failed to produce evidence of having issued proceedings out of the Local Land Court in Tari.  This led to an order on 05th November 2015 for the Land Court in Tari to confirm what if any arrangements are in place to hear and determined the dispute in this matter.  On 3rd February 2016, when the matter next returned, the First Defendants again failed to produce any evidence of having commenced Local Land Court proceedings in Tari. They did produce evidence of some correspondence going into the District Court in Tari saying some step was being taken to have the matter mediated by some persons claiming to be land mediators in Tari.  In the light of that, the Court extended the earlier orders and adjourned the proceeding to 18th February 2016.  At that time the Court also ordered that it will issue mediation orders unless the earlier orders for the First Defendants to issue Local Land Court proceedings in Tari was fully complied with. After a brief adjournment to the 19th from the 18th February 2016, the matter was further adjourned to 02nd March 2016.  

84.	In the meantime, the parties were directed to turn up in the Tari Local Land Court and secure a date for a hearing of any proceeding issued by the First Defendants. That was on indications from the First Defendants that they have taken steps to have the issue they raised dealt with by the Local Land Court. At the same time, the Court repeated its earlier warnings that the proceeding will be referred to mediation failing compliance of the orders for the First Defendants to issue and meaningfully prosecute court proceedings in the Local Land Court in Tari. Upon the next return of the matter on 2nd March 2016, the First Defendants have not complied with the earlier repeated orders. At that point, the Court decided it will issue orders for mediation and asked the parties to return to the Court with a set of draft consent orders. On the next return date, 9th March 2016, the parties handed up draft consent orders for mediation, which the Court endorsed.  The consent orders allowed for the matter to return to the Court on 6th June 2016 after completion of the mediation process.

85.	The First Defendants with the support of their lawyer Mr. John Kumara did not fully cooperate with the other parties in taking all the steps they needed to take to ensure the Court ordered mediation did take place. Instead, they were re-agitating the customary land ownership issue, without even having issued at this point any Local Land Court proceeding and thus in breach of the Court orders. As stated in paragraph 4 of his affidavit of 16th May 2017, Mr. Kumara took issue with the consent orders for mediation arguing that his client did not consent.  This ran against what the Court heard and received in open Court on 9th March 2016 when the draft orders were handed up and endorsed by the Court.  Consistent with that attitude however, Mr. Kumara failed to commit to discussing ways and means to get the Court ordered mediation under way when the parties met with the mediator on 23rd March 2016.  Instead he managed to get the mediator and the other parties to agree to an adjournment for him to seek and receive his client’s instructions on the alleged customary landownership issue, which the Court had already taken into account and issued the mediation orders.  If he was committed to complying with the order for mediation he would have attended the intake appointment with his clients, which could have prevent unnecessary adjournments and expedite the mediation process.  After having secured the adjournment he failed to revert to the mediator and the parties promptly.  That forced the other parties and the ADR services to enquire from 12th to 19th April 2016 of Mr. Kumara and his client with a view to proceeding with the mediation without further unnecessarily delay.  Despite these efforts, he did not appropriately respond.   That forced the matter to return to the Court on 18th May 2016, when the Court reconfirmed the mediation orders and the matter returning to the Court on 6th June 2016 after mediation.

86.	Meanwhile, 30th May 2016 was fixed for the deferred intake.  When the day arrived Mr. Kumara informed that he had an urgent District Court matter at 1:30 without any specifics and undertook to attend the meeting as soon as he finishes with that matter. According to Mr. Kumara’s own affidavit sworn and filed on 18th July 2016 he finished at 3:00pm.  Yet he did nothing about attending the meeting or enquiring about what happened and when would the parties and the mediator next meet. As noted in the mediator’s email of 30th May 2016, which is part of Kumara’s affidavit, annexure B, the meeting was taking place 30 seconds away from the Court Mr. Kumara was purportedly attending to. Hence, it did not require much effort for Mr. Kumara to attend or attend on the mediator and find out and confirm the next date for the intake. This failure to do something about complying with the orders for mediation continued when the matter returned to the Court on 6th June 2016.  Neither Mr. Kumara nor any of his clients turned up on that date despite that date being clearly fixed in the orders of 18th May 2016 when he was present.  The Court endorsed an appointment for the intake to take place on 10th June 2016.  It also issued orders for the parties to take serious and meaningful steps to have the matter mediated in accordance with the orders issued on 9th March 2016.  The Court also warned by expressed orders that there would be judgment against any party failing to comply with the mediation orders and fixed 20th June 2016 for a return of the matter.  Despite these efforts and orders, the First Defendants continued to fail to comply with the Court orders and did not turn up at the 10th June 2016 intake appointment. This intake meeting if it proceeded, would have discussed all logistics, security and other steps the parties and the mediator needed to take to ensure the mediation proceeded safely and smoothly and conclude within the time period given by the Court. Without that happening, the mediation was not able to proceed.  Accordingly, the mediator indicated that he would issue a bad faith certificate against the First Defendants.

87.	Come the 20th June 2016, it became clear that the First Defendants failed yet again to take any meaningful steps to allow for the mediation to take place and also failed to turn up in Court.  Rather, that proceeding with the forewarned judgment or orders against the First Defendants, the Court adjourned the proceeding to 5th July 2016.  Finally, on 5th July 2016, the Court issued a number of orders. This included an order for the mediator to formally file his “bad faith” certificate against the First Defendants. The Court also ordered the parties to file affidavits of evidence disclosing steps they have taken to comply with the orders for mediation and their submissions under r.10 (7) of the ADR Rules.  The 20th July 2016 was then fixed for the Court to receive the submissions.  Eventually, the mediator issued his bad faith certificate against the defendants, the parties have filed their affidavits and I received their submissions.  

88.	Counsel for the First Defendant continues to maintain his position that, the Court erred in issuing the orders for mediation on 9th March 2016 when his clients were raising an issue of customary landownership.  In so doing, he fails to understand and appreciate this Court’s position on that issue as discussed and set out in paragraphs 48 and 49, why this matter is in Court as discussed in paragraph 49 and 50 above and the reasons for ordering mediation as discussed in paragraphs 51to 62 above. The position taken by the First Defendants through Mr. Kumara is in total defiance of the import of the relevant law on point as clearly brought out by the various judgment as discussed and set out in paragraphs 63 to 81 above.  Indeed the step taken here by Mr. Kumara resonates with what Mr. Koeya Peri did in the case of Roger Meckpi v. Luke Fallon and Dekenai Constructions Ltd (supra).

89.	But in the present case, Mr. Kumara made a deliberate decision upon being instructed to take a position that expressly went against complying with orders for the parties to engage in direct out of court settlement discussions and failing that mediation.  Consistent with that position, it appears clear to me that Mr. Kumara deliberately failed to turn up for the various reschedule intake meetings.  The only explanation Mr. Kumara gives for his failures to attend the intake sessions was that his email broke down after 30th May 2016 until after 6th June 2016.  That however does not and cannot in anyway explain his and his client’s failure to follow up with the mediator, the other parties and the Court staff.  Also this does not explain his failures to attend Court on 6th June and 20th June 2016.   He gives no explanation as to why he was not able to do the appropriate follow ups and attend the intakes or appear in Court.  What is clear is he and his client firmly holding the view that the Court erred in ordering mediation at the first place and they had no obligation to comply with the Court orders.  That position was clearly demonstrated when he formally filed the notice of motion document number 48 on 17th June 2016.  In that motion, the First Defendants seek amongst others, orders dismissing this proceeding for want of notice under s. 5 of the Claims by and Against the State Act, when the State Defendants ably represented by Mr. Siki are not raising the issue and instead are supportive of the order for mediation.  Also they are seeking a dismissal of the proceedings based on the customary land ownership issue being raised and the principle plaintiff lacking authority from his clan or tribe to issue this proceeding.  All of these reliefs are being sought without complying with any of the relevant decisions and orders of the Court addressing and determining these points.

90.	The First Defendants’ motion is nothing short of an action in contempt of the orders made before and after 09th March 2016, with the latest of 6th June 2016 which constantly strengthened and extended the 9th March 2016 orders.  Strictly speaking, those orders required compliance within two months according to the provisions of r. 9 (3) of the ADR Rules.  This means the parties should have taken all the steps they were required to take to enable the mediation process to commence and conclude in accordance with the dates fixed by the orders for mediation issued on 9th March 2016 and consistently and continuously extended by the subsequent orders with the latest orders of 6th June 2016.  Instead, there has been a substantial delay of 1 year 4 months to 20th July when I received submissions following the First Defendants’ bad faith.   All of these delays is on account of the First Defendants and their lawyers raising issues raised and taken into account before the Court decided to order mediation.  As earlier noted once the order for mediation was made all parties including the First Defendants whether they consented or not, were obliged to take meaningful steps to give the mediation process a fair go to see if it can enable the parties to arrive at a workable and lasting resolution. The issues they were raising would have been easily put to the members of the Ere and Hewa clans as well as the Kutage tribe back in the Hela Province where the these clans and tribe is resident and located.  Taking this proceeding and the issues they raise back to the people would be the best and surest way of ascertaining who is acting for, with and for the benefit of the whole clans and tribe and who is not.  Such a process would and have a clear, open and transparent way of seeking and securing the whole of the clans’ and tribe’s membership’s position and views on the issues presented and how they should be resolved.  Given that, the only reasonable inference open to be drawn from the First Defendants’ clearly contemptuous conduct with the support of their lawyer is because they wish not to face their own people and account to them their actions.  This means the First Defendants might have incorporated the ILGs without the knowledge, involvement and the free and informed consent or approval of the full membership of the clans and the tribe.   If the opposite was the case, they would have readily welcomed the suggestion and do everything possible to ensure the Court ordered mediation process does take place without all these unnecessary contemptuous and delay tactics being played out by them through their lawyer.

91.	The only proper way to get around the mediation order is by way of an appeal to the Supreme Court.  But going that way might turn out to be an exercise in futility.  This is because of the requirement that the decision sought to be appealed against must be a final determination of the matters in dispute between the parties or the substantive proceeding. This is of course subject to the authorization of appeals under s. 14 (3) of the Supreme Court Act (Chp. 37).  The decision in Barrick (Niugini) Ltd v John Tole Pokoli might be a case on point.  There the National Court directed the parties to have the proceeding before it resolved through their direct negotiations or mediation and failing that trial.  The Court also granted an interim injunction.  The appellants appealed against the interim injunction orders and sought a stay of injunction and stay of the National Court proceedings. The Court decided to stay the injunction orders but refused to stay the proceedings.  In so doing it endorsed the National Court’s direction for the parties to resolve the matter and failing that mediation.  An order for mediation only requires the parties to use the mediation process with the assistance of a mediator to explore options for a resolution of their dispute and reach agreement on an option that will work well for the parties in the dispute.  Failing any agreement, the mediation also comes with an ability to help identify and narrow down the real issues between the parties and prepare them for an expedited hearing and disposal of the matter. Given that, an order for mediation could hardly be seen as a final decision on any issue or any proceeding for the purposes of mounting an appeal.  

92.	If the First Defendants were serious with the issues they were taking, they should have appealed against the orders for mediation notwithstanding the views I have expressed above.  If they did that, the appeal could have been heard and determined by now.  They failed there also for reasons only known to them.

93.	Having regard to all of the foregoing, I find that the mediator had good basis to issue the bad faith certificate against the First Defendants.  I also find that the First Defendants failed to provide any reasonable explanation for their bad faith conduct.   I further find that the First Defendant with the assistance of their lawyer Mr. John Kumara have acted in breach of the various Court orders issued by this Court from the first day the matter was in Court up to the last date fixed for mediation intake on 10th June 2016, quite deliberately.  The First Defendants and their lawyers are thus in clear contempt of Court on each of the occasions they failed to comply with the orders of the Court and most of those were in the face of the Court not once but repeatedly.  That is a very serious matter, which makes this case worse than any of the earlier bad faith at mediation cases. On each occasion of the breach of the Court’s orders, I was prepared to excuse the breach of court orders and hence the clear contempt in the hope that, Mr. Kumara and his clients will finally get around to complying with the Court orders.  I also deferred taking contempt proceedings against Mr. Kumara and his client to avoid shifting attention away from having the substantive matter disposed of without unnecessary delay through mediation and failing resolution there despite good faith efforts an expedited trial.  If after this judgment and the orders this Court issues today, there is further failure to comply by Mr. Kumara and his clients that will amount to contempt in the face of the Court yet again.  Only then the Court will not be slow to deal with them for contempt on the return of the matter.

94.	I note with concern that Mr. John Kumara a very senior lawyer has deliberately failed to discharge his duties under the Lawyers Professional Conduct Rules, r. 8 (6) and (7) to his client and to this Court under r. 15 (2), (4) (a) and (b) and (10).   These rules require all lawyers to take all steps necessary to promptly dispose of their client’s claims and to avoid a wastage of the Court’s time.  In particular, lawyers are require to settle their clients claim and avoid delaying proceedings and therefore increase costs to their clients.  This provisions were enacted or promulgated long before the ADR Rules.  The ADR Rules helps to provide a clear and better avenue for the lawyers to discharge their duties promptly and bring about lasting, efficient and effective outcomes to their client as opposed to Court proceedings which can go around in a vicious circle, without any finality in sight for some time.   A lawyer who fails and worse still, take the kind of position Mr. Kumara took in this case would clearly be in breach of his duty to his client and the Courts. Such a conduct could attract personal liability both in costs and the substantively on account of the breaches. 

Issue (3) – Appropriate penalty for bad faith

95. 	The final matter I turn to is the question of, what is an appropriate penalty for the First Defendants and their lawyer’s contemptuous and bad faith conduct. As noted already, the Plaintiffs submit that the First Defendants should be penalized.  However, they do not elaborate on what kind of penalty should be imposed against them. The State Defendants argue for referral of the matter back to mediation but with an order for costs against the First Defendants since the order for mediation and the costs of the parties returning to mediation. The State Defendants also submit that if the First Defendants continues to fail to comply with any new orders for mediation and they act again in bad faith, judgment should then be entered for the Plaintiffs and the Second to the Sixth Defendants.  On the other hand, the First Defendant submits that they and their lawyers are not guilty of bad faith and therefore by implication no penalty should follow them.  They also submit that, even if they are guilty of bad faith, the Court should not have referred this matter to mediation in the light of the customary land dispute issue. 

96.	On the material before the Court, I have already found that there was basis for the mediator to issue his bad faith certificate against the First Defendants.  I have also found that the First Defendant and their lawyer, Mr. John Kumara’s conducts amount to deliberate repeated acts of contempt of Court which makes their contemptuous conduct and bad faith more serious.  I have also found that the issue of ownership of customary land does not arise in the particular circumstances of this case, but what appears to be a secrete incorporation of the Ere and Hewa ILGs to secretly access funds belonging to the respective clans.  If however there is in fact an ownership issue, the only sure way of confirming if indeed that is the case, is to take this proceedings and the issues they raise back to the people through the mediation process.  The majority, if not the whole of the members of the Ere and Hewa clans and the Kutage tribe may not necessarily be aware of the existence of this proceeding and the issues presented.  If not for anything else, the mediation process is still a useful process through which the correct position from the majority of the people’s perspective on all of the issues raised in this proceeding can be independently and more openly and transparently obtained.  That would be far better than the Court wasting its time and resources trying to determine the issue of whether indeed the issue of customary ownership exists in this case or summarily determine that such an issue does exist.  This is particularly called for in the light of the First Defendants’ failing to comply with repeated Court orders for them to issue formal court proceedings raising the ownership issue in the Local Land Court in Tari against the Plaintiffs.  Of course, if through the mediation process the parties are able to jointly confirm that a customary land ownership issue exists notwithstanding the land having now become State land, they will have the option of resolving the issue by their own agreement through the mediation process or return to the Court with an agreement on how they wish to have the issue of ownership resolved.  If the process under the Land Dispute Settlement Act is operating well in the Hela Province that might be the process the parties might agree to return to. If however, the suggestion in the affidavit material before the Court is correct that the system is dysfunctional, the parties should be able to acknowledge that and agree on how to jointly approach both the problems of process and a substantive determination of the ownership issue and proceed accordingly.  Indeed, I noted that in areas where the process under the said Act is not function or dysfunction, most of the disputes are being resolved by the parties own agreements.   

Decision of the Court

97.	Having due regard to all of the above, I consider an order for the parties to return to mediation and give that a serious and meaningful chance of helping the parties to find a solution to all the issues presented  in this proceedings is the most appropriate course to take.   Accordingly, I make the following orders:

1.	This matter is ordered back to mediation on the same terms as the orders of 09th March 2016 subject only to changes to the dates for the various events and any other changes the parties consider appropriate and agree to and have them incorporated in a revised mediation order.

2.	The parties shall meet with the mediator by no later than 10th July 2017 and settle upon a draft order for mediation in accordance with term 1 of these orders for the Courts endorsement if all is in order;

3.	The First Defendants and their lawyer Mr. John Kumara shall take the lead without exception in fully complying with these orders and the mediation orders once they are issue in accordance with terms 1 and 2 of these orders.

4.	The Plaintiffs and the Second to the Sixth Defendants costs from 21st April 2015 when mediation was first directed to today are ordered against the First Defendants to be borne by them or Mr. John Kumara personally, depending which of them contributed to the issuance of the bad faith certificate and the repeated breaches of the various orders of the Court from 21st April 2015 to 6th June 2016.

5. 	The Costs ordered under term 4 shall be taxed, if not agreed and shall be paid before the mediation ordered in accordance with terms 1 and 2 takes place.

6.	If the First Defendants and or Mr. John Kumara fail to comply with these orders and any of the terms of the mediation orders issued in accordance with terms 1 and 2 of these orders, shall be treated as contempt in the face of the Court and the Court shall appropriately deal with them.

7.	The matter shall return to the Court on 12th July 2017 at 9:30 am for an endorsement of a revised mediation order in accordance with terms 1 and 2 of these orders.

8.	The time for the entry of these orders is abridged to take place forthwith upon the Court or the Registrar signing them. 

________________________________________________________________
Chesterfield Lawyers	: Lawyers for the Plaintiff
Kumara Lawyers		: Lawyers for the First Defendants 
Greg Manda Lawyers	: Lawyers for the Second to the Sixth Defendants