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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 534 OF 2018
BETWEEN:
ANDY KAPINIAS
Ward Member of Lamarainam, Inland Baining Local Level Government, Gazelle District
Plaintiff
AND:
O & G NIUGINI LIMITED
First Defendant
AND:
LAMUS INCORPORATION LAND GROUP
Second Defendant
Kokopo: Anis J
2018: 17 & 19 October 2018
NOTICE OF MOTION – application to dismiss proceeding – Order 12 Rule 40(1) of the National Court Rules – want of reasonable cause of action, frivolity and abuse of court process – whether plaintiff has standing – whether plaintiff has any interest or is privy to the lease agreement which he seeks to declare as null and void
Cases cited:
Sir Julius Chan & 1 Or v. Hon. Walter D Schnaubelt & 1 Or (2018) SC1700
Re Petition of Somare [1981] PNGLR 265
Andy Kapinias v. O & G Niugini Ltd & 1 Or (2018) N7486
Amos Ere v. National Housing Corporation (2016) 6515
Counsel:
Mr A. Chillion, for the Plaintiff
Mr E. Wamp, for the Defendants
RULING
19th October, 2018
1. ANIS J: This is my ruling in relation to an application filed by the defendants to dismiss the proceeding. It was moved on 17 October 2018. The plaintiff opposed the application. I reserved my ruling thereafter to today.
APPLICATION
2. The application is primarily based on Order 12 Rule 40(1)(a)(b) and (c) of the National Court Rules. The defendants argue that the plaintiff’s claim, (i) discloses no reasonable cause of action, (ii) is frivolous and vexatious, and (iii), is an abuse of the Court process.
RELEVANT BACKGROUND
3. The plaintiff initially commenced this proceeding at the Waigani National Court. On 9 August 2018, is Honour Justice Kariko granted ex-parte interim orders in favour of the plaintiff and had the matter transferred over to the Kokopo National Court. On 22 August 2018, the plaintiff applied for summary judgment. In my ruling in Andy Kapinias v. O & G Niugini Ltd and 1 Or (2018) N7486, which was delivered on 28 September 2018, I refused the application. The defendants filed the present application after that on 9 October 2018. The application returned to Court on 12 October 2018. The plaintiff objected to the application being moved on the said date because he argued that the application was short served. I granted the adjournment and the defendants’ application was set down for hearing at 9:30am on 16 October 2018. On 16 October 2018, before the application was moved, the plaintiff informed the Court that they had filed an application for leave to appeal against the Court’s decision of 28 September 2018. Counsel advised the Court that an application for stay was also filed and that it would be heard by the Supreme Court on 16 October 2018. On that basis, counsel requested for an adjournment of the defendants’ application. In the exercise of my discretion, I granted the request for an adjournment and had the matter adjourned to the next day on 17 October 2018. On 17 October 2018, the plaintiff’s counsel informed the Court that the Supreme Court had refused the stay application. Counsel however submitted then that regardless of that, that the Court should defer further hearings until after the hearing and determination of the plaintiff’s application for leave to appeal, which counsel said was pending before the Supreme Court. I heard submissions from both counsel and in the end, I ruled against further adjournment concerning the defendants’ application to dismiss the proceeding. I will refer to the transcript of proceeding for that day regarding my reasonings for refusing to adjourn the defendants’ application.
4. Regarding the facts, I will say this. The plaintiff is a ward member of an area known as Lamarainam. The ward area is within the Inland Baining Local Level Government which is part of the Gazelle District of East New Britain. In the plaintiff’s originating summons, he seeks these two (2) main relief:
5. The claim relates to oil palm or agricultural activities that are happening within the ward area of the plaintiff. It appears from the evidence filed that the plaintiff was concerned of the activities and as a result had gone out of his way to investigate. Evidence disclosed showed that he had conducted searches at the Investment Promotion Authority regarding, amongst other things, the business status of the first defendant. Based on that, he claims that the first defendant was not certified as a foreign entity to carry palm oil business or activities in Papua New Guinea. The plaintiff also refers to a dealing, namely, a lease agreement that had been entered into between the first and second defendants which is dated 19 January 2017. He says that because of the business status of first defendant, as revealed in records kept by the Investment Promotion Authority, the said agreement should be declared null and void. He requests the Court to grant these relief based on purported breaches of the provisions of section 25 of the Investment Promotion Act 1992 (IP Act).
6. The plaintiff says that he is suing the defendants in his capacity as a ward member, in this case, the ward member of Lamarainam, which is located within the Baining Local Level Government. The said local level government is covered or falls under Gazelle District, which is a designated district which forms part of the East New Britain Province.
ISSUE
7. The main issue relates to the plaintiff’s standing or interest in the matter.
STANDING
8. Recently on 31 August 2018, the Supreme Court in the case, Sir Julius Chan & 1 Or v. Hon. Walter D Schnaubelt & 1 Or (2018) SC1700, not only explains but distinguishes ‘standing’ in this type of situation, namely, in a case where a public office holder like a member of parliament would seek declaratory orders in an ordinary civil proceeding, and compare such a standing with the other type, that is, where the member would invoke powers of the Supreme Court under section 18(1) of the Constitution where the validity of an Act of Parliament or alleged violation of a provision of the Constitution, would be the basis for seeking relief from the Court. The plaintiffs who were members of parliament commenced proceeding in the National Court. They sought declaratory orders concerning a Memorandum of Understanding which had been entered a decade ago in 2007 between the State, the New Ireland Provincial Government, the Nimamar Rural-Local Level Government and the Lihir Mining Area Landowners Associate Inc. Based on the MoA, 50% of the royalty monies paid from the Lihir Gold Mine was to be distributed to designated recipients within the terms of the MoA. The plaintiffs, as members of parliament representing their respective electorates, were dissatisfied of the terms of the MoA. They also allege lack of compliances of the distribution clauses by the New Ireland Provincial government to the designated recipients of the royalty money. The plaintiffs sought the following orders:
9. The defendants applied to dismiss the proceeding. They alleged that the plaintiffs did not have standing to file the Court proceeding in the first place. The trial judge refused to dismiss the proceeding on that basis. The defendants appealed to the Supreme Court. The Supreme Court upheld the defendants’ appeal and dismissed the proceeding. In its decision, the Supreme Court held, and I read from paragraphs 10 to 19,
10. The basis upon which her Honour dismissed the appellants’ application is tolerably clear. Her Honour was “of the view that the parties, Namatanai and Kavieng Districts are beneficiaries under the [MoA and entitled to come to court with what they regard as a branch of those two clauses [clauses 6 and 23]”. It is obvious from this statement of her view that her Honour considered that the two Members of Parliament, now the present respondents, had standing to seek the relief claimed in the National Court.
11. At the forefront of the appellants’ submission on the appeal was the proposition that neither the respondents as Members of Parliament nor for that matter the two districts were parties to the MoA. For this reason, it was submitted that they lacked standing to claim the relief sought. Further, it was submitted that each district was but a geographic subdivision within the Province. It was the Province as a body politic that was, unlike a district within a Province, an entity capable of suing and being sued. As to the status of a Province as a legal entity, the appellants referred to s 6 of the Organic Law on Provincial Governments and Local-level Governments.
12. The respondent Members of Parliament sought to uphold the reasoning of the learned primary judge.
13. As an initial observation, it is just a fact that neither Sir Julius Chan nor the Acting administrator was a party to the MoA. For that matter, save for the State, none of the other named defendants in the National Court proceeding was a party to the MoA. It was the Provincial Government, not either Sir Julius Chan or the Acting Administrator, which was one party to the MoA.
14. Even if, by amendment, both Sir Julius Chan and the Acting Administrator were removed as parties and the Provincial Government made a defendant, the question would remain by what right may the two Members of Parliament claim the relief sought?
15. This was not a case in which a citizen, political office-holder or otherwise, sought to invoke the powers of the Supreme Court under s. 18(1) of the Constitution to claim relief in respect of an asserted violation of a requirement found in the Constitution. In that type of circumstance, the more liberal approach to standing, evident in Re Petition of Somare [1981] PNGLR 265 and Re Geno[2015] PGSC 51; SC1455, might well confer on a Member of Parliament as a citizen, a right to claim declaratory relief in respect of that asserted violation. Nor was it a case where some adverse action of government had directly affected the office which each of the respondents held. In that circumstance also they would have standing to seek relief in the National Court’s judicial review jurisdiction by way of a declaration that the adverse action was contrary to law.
16. In Mamum Investments Pty Ltd v Ponda (Mt Hagen YMCA Case) [1995] PGSC 15; [1995] PNGLR 1, Kapi DCJ and Injia J (as they then were), as had Andrew J in PNG Air Pilots Association v Director of Civil Aviation [1983] PNGLR 1 at 3, cited with approval an observation in relation to standing made by Mason J (as his Honour then was) in Australian Conservation Foundation Inc v Commonwealth of Australia (1980) 146 CLR 493 at 547 to the effect that, depending on the nature of the relief sought, a plaintiff will in general have standing when he can show an actual or apprehended injury or damage to his personal or property rights, to his business or economic interests and perhaps to his social or political interests.
17. Inferentially, as Members of Parliament for electorates, the boundaries of which include the districts referred to in clause 6(c) and 23 of the MoA, the respondents perceive some political interest in the securing of the relief claimed. But the tentative allowance in the cases cited in the preceding paragraph that standing might perhaps be found in a political interest does not mean that, whenever such an interest may be discerned, a plaintiff with no more than such an interest will have standing. That type of interest will more readily ground standing where the validity of an Act of Parliament or some other alleged violation of the Constitution is the subject of the claim for relief.
18. As it is, the MoA is an agreement of a kind contemplated by s 99 of the Organic Law on Provincial Governments and Local-level Governments between bodies politic at national, provincial and local government levels and a named incorporated landowners association. It is the parties to that agreement which have the interest in the adherence to its terms sufficient to seek declaratory and related ancillary relief in respect of an alleged breach of that agreement. The two Members of Parliament may well have a political interest, arising from representations made by their electorate’s constituents, in whether there is adherence to the MoA by a particular government party to that agreement. But that type of interest does not confer standing upon them to bring a proceeding for the relief pleaded before the judicial branch of government. Rather, that interest is one for assertion before the political branch of government; in other words for raising as an issue in the Provincial Assembly or in the National Parliament. One sequel to the raising of the assertion before the National Parliament is that the National Government might have been persuaded to investigate the merits of any such assertion. In turn, that might have meant that the State, which was a party to the MoA came to claim as against the Province relief of the kind sought by the respondents.
19. The learned primary judge ought to have concluded that neither of the respondent Members of Parliament had standing to claim the relief sought. The proceeding ought to have been dismissed accordingly.
(Underlining is mine)
10. I adopt and apply the principle held therein to this case.
11. The plaintiff’s standing may be political in nature. Perhaps the agreement signed between the first and second defendants or the oil palm development activities, were against or detrimental to the affairs or interest of his ward. If that was or is the case, then that is something that the plaintiff could perhaps raise with his ward president or with the local level or the provincial assembly. The plaintiff’s standing as a ward member is confirmed by his recent affidavit filed on 12 October 2018. At paragraph 4 of the affidavit, he expressly states that he is suing in his capacity and I quote in part, as a Ward Member of Lamarainam, an authority of the State....
12. So, in summary, I find that the plaintiff has no standing in bringing the court proceeding in this manner. I stand on the authority of the Supreme Court in Sir Julius Chan & 1 Or v. Hon. Walter D Schnaubelt & 1 Or (supra). Following the said decision, the plaintiff’s standing in this proceeding cannot be given a liberal meaning like for example in the case of Re Petition of Somare [1981] PNGLR 265 but rather be confined to a more restrictive or personal in nature, that is, restricted to his actual or apprehended injury or damage to his personal or property rights. I am therefore bound to follow the said approach. Of course, I may be guided if the plaintiff is able to assist with case authorities that supports his argument or refutes the Supreme Court’s decision. Counsel did file an extract of argument. However, and with respect, no case authorities or law on this point have been cited. Without any authority, I cannot see how I can deviate from what the Supreme Court has stated in Sir Julius Chan & 1 Or v. Hon. Walter D Schnaubelt & 1 Or (supra).
PLAINTIFF NOT PRIVY TO THE AGREEMENT
13. The plaintiff has admitted through counsel in the earlier hearing (i.e., in relation to the application for summary judgment) that he has no interest in relation to the lease agreement between the first and second defendants of 19 January 2017. This was also noted in my published judgment, namely, Andy Kapinias v. O & G Niugini Ltd & 1 Or (2018) N7486.
14. In his recent evidence, the plaintiff did not disclose evidence to the contrary. His counsel also makes no submissions to the contrary or submissions that says that the plaintiff has changed his position regarding his interest to the agreement of 19 January 2017.
15. I note that it is not the Court’s finding but rather an undisputed fact that the plaintiff is not privy to the lease agreement concerned. If he has no interest whatsoever to the lease agreement, then what right or standing does he have to investigate the first defendant in the first place? What right or standing does he have to try to nullify an agreement which he is not a party to or which he has no business in? The answer to these is, “the plaintiff has no such right or standing because he is not privy to the dealings including the lease agreement between the first and second defendants”. This, in my view, would make the plaintiff’s claim without merit or frivolous and an abuse of the Court process.
16. So even if I may be wrong in my findings and ruling on standing, I will say this. The plaintiff is not privy to this private dealing between the first and the second defendants. As such, he has no right to seek the relief which, if granted, would adversely affect the interests of the defendants but not his. He has no primary right which he is seeking to protect. See case, Amos Ere v. National Housing Corporation (2016) N6515.
17. The defendants also refer to section 41A of the IP Act. They argue that the plaintiff cannot be the permitted person, under this provision, to apply to invalidate the lease agreement. They say that only a party to an agreement or the Authority meaning the Investment Promotion Authority, are the two (2) designated persons who are entitled to invoke section 41A. Mr Chillion, counsel for the plaintiff in response argue that the plaintiff takes no issue with that. But counsel submits that that was not the provision invoked by the plaintiff in coming to this Court. Counsel submits that the plaintiff filed the proceeding under the common law and principles of equity.
18. I see no references made by the plaintiff in relation to section 41A. The provision was alluded to by the defendants’ counsel in his submissions in the present application as well as at the hearing of the earlier application for summary judgment. I uphold the plaintiff’s submission in this regard. I find that the defendants have misconstrued the plaintiff’s position. That said, it is therefore not necessary for me to venture further concerning section 41A of the IP Act beyond this point.
SUMMARY
19. I will grant the defendants’ application. I will dismiss the proceeding on the basis that the plaintiff has no standing in the matter. With the said finding, this makes the claim without merit, frivolous and an abuse of the Court process. I also find this. Given the undisputed fact that the plaintiff is not privy to the lease agreement of 19 January 2017, the plaintiff has no rights that would have warranted the granting of the relief that he seeks in the originating summons.
COST
20. Cost is discretionary. The defendants strenuously argue that cost should be awarded on an indemnity basis against the plaintiff and his lawyers. I am inclined to exercise my discretion in that manner against the plaintiff.
21. Let me say this. Before the plaintiff formally commenced his action at the National Court, he urgently filed a notice of motion on 8 August 2018, that is, at the Waigani National Court. A day after on 9 August 2018 and still without a formal proceeding on foot, he sought and obtained interim ex-parte restraining orders against the defendants. The ex-parte restraining orders remain to be argued to this day except that they will now cease after this Court’s decision. The plaintiff also had the matter transferred over to the Kokopo National Court on the 9th of August 2018. On 15 August 2018, the plaintiff formally filed his originating summons at the Kokopo National Court. But before the interim orders were to be argued and whilst the matter was still regarded as a fresh matter, the plaintiff proceeded immediately to apply for summary judgment. The said application was heard on 7 September 2018 and later dismissed on 28 September 2018. When I look at all that, I see that the plaintiff had treated the matter as urgent and had attempted to obtain judgment quickly without following the normal hearing processes. The defendants it seems and before this application was moved, barely had any proper opportunity to respond to the plaintiff’s claim and to the interim ex-parte restraining orders. And they have been restrained all this time from the 9th of August 2018 to today 19 October 2018, which is a total of more than 2 months, and now only to find out that the plaintiff’s claim is without merit, is frivolous and is an abuse of the Court process.
22. There is evidence that the defendants have given notice to the plaintiff of their intention to seek cost on an indemnity basis. I refer to annexure A to Eward Wamp’s affidavit filed on 5 October 2018. I find that this case meets the exception to award cost at a higher rate than the normal order for costs on a party/party basis. I will award cost of the proceedings against the plaintiff personally which shall be awarded on an indemnity basis to be taxed if not agreed. I decline to also award costs in that manner against his lawyers. Although I note that the plaintiff’s actions were primarily based on advice he may have received from his lawyers, there is nothing before me to suggest or based upon which I can safely hold his lawyers also accountable to the cost of the proceeding.
THE ORDERS OF THE COURT
The Court orders accordingly.
_____________________________________________________________
Namani & Associates: Lawyers for the Plaintiff
Edward Wamp Lawyers: Lawyers for the Defendants
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