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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS No. 228 OF 2021
BETWEEN:
JAMES BAI, Village Magistrate
First Plaintiff
AND:
ELIAS LAGE, Dispute Settlement Authority
Second Plaintiff
AND:
Pastor SAMUEL MORO, Gule United Church
Third Plaintiff
AND:
GOLDIE BUBU, Village Elder
Fourth Plaintiff
AND:
HENRY TULE, Chairman, Gule Incorporation
First Defendant
AND:
GULE LAND GROUP INCORPORATION
Second Defendant
AND:
BANK SOUTH PACIFIC
Third Defendant
Kimbe: Numapo J
2021: 11th November & 10th December
CIVIL PRACTICE AND PROCEDURE – Application for substantive orders - Representative class action, O 5 r 13 (1) NCR – Locus Standi – Informed consent from landowners – Proper authorization is mandatory - Application dismissed.
Cases Cited:
Papua New Guinean Cases
Yakam Maliaki & Ors v Judah Utin & Ors (2019) N8040
Simon Mali v. Independent State of Papua New Guinea [2002] PNGLR 15
Tigam Malewo v. Keith Faulkner (2009) SC960
Eliakim Laki v, Maurice Alaluku, Secretary for Lands [2000] N4158
Wilfred Mamkuni v. Ly Cuong-Long and Jant Ltd (2011) N4674
Louis Medaing v Ramu Nico Management (MCC) Ltd (2010) N4158
Lupia v ExxonMobil PNG Ltd [2016] PGNC 285; N6484
Overseas Cases
Roche v Sherrington [1982] 2 All ER 426
Counsel:
Mr D. Kari, for the Plaintiffs
Mr E. Guarim, for the First Second & Third Defendants
DECISION
10th December, 2021
1. NUMAPO J: This is a ruling made on an inter partes hearing made returnable following an interim order made ex parte pursuant to Order 14 Rule 10 (1) (3) and Order 12 Rule 1 of the National Court Rules (NCR) and section 155 (4) of the Constitution. Plaintiffs obtained interim restraining orders on the 15th July 2021 on the First, Second and Third Defendants, their servants, agents and any other third parties from approaching the Bank South Pacific Limited and withdrawing Gule Land Group Incorporated Funds from the Fresh Fruit Bunch payments, Land Rentals and Dividends held under the Gule Land Incorporated Bank South Pacific Limited Band Account Number 100096288212.
2. Plaintiffs, all from Gule Village claims to have made several attempts to change the Gule ILG Controlling Body for reasons that there was never an Annual General Meeting since 2009 and there was no financial report published.
3. On the 04th January 2018, a general meeting of the Rigula Group which comprises of Rikau ILG, Gule ILG and Meloks ILG was held at Gule village and it was resolved that:
(i) All bank accounts are to be frozen until a new management is in place;
(ii) All clans under Rigula Estate are to appoint their clan representatives; and
(iii) A New Britain Palm Oil Limited (NBPOL) representative and a nominated West New Britain (WNBP) Provincial Government representative should be present to witness the new management taking office.
4. Defendants submitted that consent was not given to the plaintiffs to conduct the meeting on the 04th January 2018 on behalf of themselves and the other 509 Gule ILG members hence, the Plaintiffs lacks standing to hold the meeting and therefore, the meeting is deemed improper and unlawful. The matter relates to representing the interests of the customary landowners of Gule village that makes up the Gule Incorporated Land Group (ILG). Both the plaintiffs and the defendants claimed to represent the interests of the same Gule people which is quite unusual. The same people cannot be suing and defending themselves, it defies logic and commonsense to say the least.
5. The issue on locus standi raises a threshold issue in my respectful view, for the reason that if I rule that the plaintiffs do not have standing to bring proceedings that will be the end of the matter and there will no need for me to therefore, address the other two issues raised.
6. In matters relating to customary land, it is important that parties show to the satisfaction of the Court that informed consent of all the clan members or landowners has been obtained to represent them in the proceedings. This applies equally to the party suing and the party defending. I will discuss the relevant principles shortly.
C. EVIDENCE FROM THE PLAINTIFFS
7. In support of the application, the plaintiffs relies on the affidavits of James Bai, Elias Laga and Goldie Bubu. James Bai said he is from the Gule Village, Hoskins, West New Britain Province (WNBP) and is the Chairman of the Kevemuki ILG. The Gule ILG was formed in 2005 and is the umbrella ILG for all the other ILGs including Kevemuki ILG. As Chairman of Kevemuki ILG he automatically becomes the clan representative on the Gule ILG. The current Chairman of Gule ILG, Henry Tule, was then the Treasurer when the ILG was incorporated and issued with a Certificate in March, 2010.
8. Plaintiffs submitted that since the current Controlling Body came into office there has never been any Annual General Meeting since 2009 and no financial report was published for the members. Several attempts were made to remove the Controlling Body but to avail. The current members of the Controlling Body have been in office since the ILG Certificate was issued in 2010 and have gone beyond their respective terms of office which is in breach of Section 8 (1) (2) of the Gule ILG Constitution which stipulates that committee members are only allowed to hold office for three (3) years and may seek re-election for a second term in office. They are only allowed to serve two terms in office and thereafter, must be replaced. The current committee members have been in office for over eleven (11) years now which is unconstitutional. There has been no elections held to elect the new executive members ever since the ILG was set up. The current committee members have never been held accountable for their actions all these years since taking office through meetings and financial reporting. This has caused a lot of frustrations and anger amongst the members of the Gule ILG.
9. James Bai stated in his affidavit that he does not have to be an executive member of the Gule ILG to him standing to question the running of the ILG. He is a member of a clan and by virtue of his clan’s member to Gule ILG, he has an interest in it. There is no law or rules that prohibits anyone other than the executive member to raise such issues.
10. Elias Laga is a committee member of the Dispute Settlement Authority (DSA) of Gule ILG since 2015. As a member, he was paid a monthly salary until it was stopped when he commenced proceedings in this matter as one of the plaintiffs. Since he became a committee member, there has never been any Annual General Meeting held or any financial reports published. Furthermore, no elections was held to elect new committee members. He noticed that the Controlling Body were serving their own interests and not the interests of the Gule ILG members so he left the committee and commenced this proceedings.
11. Goldie Bubu is a Village Elder of Kabulbulu clan within the Gule village, Hoskins, WNBP. He stated in his affidavit that this was not the first time they have challenged the current management of Gule ILG led by the current Chairman, Henry Tule. In 2012, they took the management to court for misuse of funds but was not successful. In 2014, an interim committee was appointed to replace the management team but this was challenged and the matter was resolved through mediation. It was resolved that Gule ILG pays K10, 000 each month to the major clans and K5000 to the minor clans. This mediated agreement for the monthly payment was observed for only a month and after that it stopped. No payment has since been made to the shareholding clans of Gule ILG. He joined the proceedings in the hope that the current Controlling Body of the Gule ILG can be removed so that clan members receive proper benefits from their Fresh Fruit Bunch and the land lease rentals from the New Britain Palm Oil Limited (NBPOL).
12. Defendants relied on the affidavit of Henry Gule, current Chairman of the Gule ILG. He argued that the plaintiff James Bai has no legal standing to question the management of Gule ILG hence, no locus standi to commenced legal proceedings against the defendants. He is not a member of Gule ILG. He is the Chairman of Kevemuki ILG which is totally separate from Gule ILG therefore, he has no standing to bring proceedings challenging the management of Gule ILG. Defendant further stated that sections 22 and 23 (a) 3 (b) of the ILG Act provides for settlement of disputes within the ILG regime and referral of disputes to court of law must be sanctioned by the Dispute Settlement Authority which did not happen in this case and therefore, is an abuse of Court’s process. Furthermore, although the Gule ILG was registered on 07th February 2003, the constitution of Gule ILG is yet to be certified.
13. Defendants asked the court to dismiss the proceedings in its entirety for being frivolous and vexatious and having or demonstrating no reasonable cause of action pursuant to Order 12 Rule 40 (10) (a), (b) & (c) of the NCR.
(i) Representative Class Action
14. The law on representative class action is found in Order 5 Rule 13 of the National Court Rules. It reads:
(1) Where numerous persons have the same interest in any proceedings the proceedings may be commenced, and unless the Court otherwise, orders, continued, by or against any one or more of them as representing all or as representing all except one or more.
(2) At any stage of proceedings pursuant to this Rule, the Court, on the application of the plaintiff, may, on term, appoint any one or more of the defendants or other persons (as representing whom the defendants are sued) to represent all, or all except one or more, of those persons in the proceedings.
(3) Where under Sub-rule (2), the Court appoints a person who is not a defendant, the Court shall make an order under Rule 8 adding him as a defendant.
(4) A judgment entered or order made in proceedings pursuant to this Rule shall be binding on all the persons as representing whom the plaintiffs sue or the defendants are sued, as the case may be. But shall not be enforced against any person not a party to the proceedings except with leave of the Court.
15. The requirements on representative class action applies to both the plaintiff and the defendant. The issue of locus standi is important when it comes to customary land. It’s a pre requisite requirement given that customary land is communally owned. Both the plaintiff and defendant must show to the court that they have the consent and/or the authority of other landowners to represent them in the proceedings. They must show proof of such consent or authorization in writing, to the Court. Failing that the plaintiff or the defendant do not have standing. This requirement of the law is emphasized and reinforced in many precedent case laws.
16. This came about as a result of some bitter experiences in the past whereby unscrupulous individuals with ulterior motives claimed to represent the landowners but instead ended up enriching themselves from monies meant for genuine landowners from projects and other developments occurring on their customary land. The requirement for proper authorization or consent from other landowners with similar interest is now a pre requisite requirement developed over the years through a number of case laws. One such case is; Yakam Maliaki & Ors v Judah Utin & Ors (2019) N8040, where I said:
“Representative class action is quite common in this jurisdiction especially in matters involving customary landowners. Land in PNG is mostly communally owned thus the informed consent of all members of the landowning clan is necessary in any dealings on the land. Disputes arising out of the land or disputes relating to compensation or royalties payment etc. requires the participation of all landowners. Some disputes often ended up in Court and in most cases, the landowners are represented by an individual such as a clan leader or a village chief or someone of standing in the community. For purposes of legal proceedings, the clan leader or chief must be properly authorized by the landowners to represent them, a practice that is well accepted in this jurisdiction. And the authority to represent them must be filed in Court as proof of such authorization to give standing to the plaintiffs to commence and/or defend proceedings. Failing that he does not have a standing to represent the group or the clan notwithstanding the fact that he might be a leader or a chief of the clan by custom. The requirement came about as a result of some bitter experiences in the past whereby certain individuals claiming to be leaders and/or spokespersons and pretending to act for the landowners ended up enriching themselves from monies meant for the landowners. The requirement for proper authorization or consent has become an established practice and also extend to lawyers acting for the landowners that every intending plaintiff must give their specific instruction evidenced in writing to their lawyer to act for them.”
17. At page 9, I said:
“The Defendants on the other hand submitted a list containing names of the members of the Waffes Clan. The list also contained names of the some of the people named as plaintiffs in the current proceedings (OS No. 116 of 2019) submitted by the Plaintiff. According to the First Defendant Judah Utin in his affidavit filed on the 5th April 2019, claimed that he represents 269 clan members of the Waffes Clan. He also provided a ‘Letter of Authority’ signed by all the members of the clan to represent their interests in the court proceedings in his capacity as Chairman of Waffes ILG Inc. against the Plaintiff Yakam Maleyaki and another Ezra Kwako both of whom, according to the Defendants, have been illegally representing the Waffes Clan and the Babuaf Tribe’s interests regarding the Wafi-Golpu Project without the consent of the clan members.”
18. In Eliakim Laki v, Maurice Alaluku, Secretary for Lands [2000] N4158 adopted later in Wilfred Mamkuni v. Ly Cuong-Long and Jant Ltd (2011) N4674, the Court held that; “any person in whose name proceedings are commenced who claims to represent other intended plaintiffs including those who claims to represent the opposing parties must produce an authority to the Court to show that he was properly authorized by them as a class representation.” (See also: Louis Medaing v Ramu Nico Management (MCC) Ltd (2010) N4158).
19. Both the plaintiffs and defendants are required to satisfy the court that they have the consent from the other plaintiffs they claimed to represent in the proceedings.
20. The Supreme Court in Simon Mali v. Independent State of Papua New Guinea (2002) PNGLR 15 made it abundantly clear, amongst others, that in all actions or proceedings of a representative nature, all of the intended plaintiffs must be named and duly identified in the originating process and pursuant to Order 5 Rule 8, each and every intending plaintiff must give specific instructions evidenced in writing to their lawyers to act for them. The decision was reaffirmed later in Tigam Malewo v. Keith Faulkner (2009) SC 960.
F. PRESENT CASE
21. In the present case, the plaintiffs did not produce any such letter of authority or consent evidenced in writing from each and every member of the clans he claimed to represent. For instance, James Bai holds himself out to be the Chairman of the Kevemuki clan, a major clan within the Gule ILG, and said to represent them in this proceedings but he has not produced any letter of consent or authority from his clan members authorizing him to represent them.
22. Goldie Bubu said that he is a Village Elder from Gule village and a member of Kabulbulu clan, a major clan within Gule village and therefore, has standing to challenge the Gule ILG but there is no evidence of consent from his clan members authorizing his appearance in this proceedings.
23. Elias Laga does not represent any clan or anyone and appears to represent himself. He was, as I see, a disgruntled former member of the Dispute Settlement Authority who decided to pull out as he was not happy with the way Gule ILG was managed. As it seems, he does not speak for anyone other than for himself in this proceedings.
24. Pastor Samuel Moro did not depose any affidavit and did not indicate if he is representing any particular interest group in this proceedings in his capacity as the Church Pastor. Without an affidavit, I am not able to determine what his real interest is or that of the church, in the current proceedings. It does not, in my respectful view, reflect well on him as a clergy man to be involved in such disputes that does not concern the church that he purports to represent.
25. The same requirement also applies to the defendant on matters concerning customary land. There must be evidence of consent given by other clan members whom he claims to represent. In the absence of such authority, he cannot speak for them.
26. Henry Tule was the only defendant in person who provided an affidavit in defending this action, the other two are corporate entities. There is no other supporting affidavits provided by any clan members whom he claimed to represent. As it appears, he is acting alone and for himself.
27. Plaintiff submitted that this is not a class action requiring consent from other clan members as the defendants are also very much part of the Gule ILG and is one and the same thing. Plaintiff submitted that they are simply raising concerns on behalf of the other clan members who are the silent majority, raising issues regarding the management of the Gule ILG by the current Controlling Body under the Chairmanship of Henry Tule. In their affidavits, they stated however, that they represent the other clan members in this proceedings but there is no proof of consent or authorization. The moment one claims to represent others with similar interests in a proceeding, the matter becomes a representative class action hence, consent of others, is required under the law (O 5 r 13). One of the reasons for that, is the requirement of an undertaking as to damages to cover for any consequential costs relating to the proceedings. That the plaintiffs or the defendants equally shares the burden of costs or any judgment liability, whatever the case might be.
28. The present dispute relates to royalties from Fresh Fruit Bunch harvested on their customary land and the land rentals paid by NBPOL over the use of their customary land. I find no evidence of any consent or authorization given to either the plaintiff or the defendant to represent the interests of the landowners making up the Gule ILG. That being the case, I conclude that both do not have the necessary mandate and therefore, standing to represent them.
29. The other issue I find concerning is the tenure of office for the current Controlling Body. If there is any truth in the assertion made that the current Controlling Body has been in office for over eleven (11) years then this is perhaps not in the best interest of the ILG, irrespective of whether a constitution exists or not regarding the term of office. It goes against the principles of good governance, accountability and transparency for the same executive members to remain in office for that long and is not healthy for the ILG. Too much power vested in the same person(s) for a long period of time can breed corruption. Members must be given the opportunity every few years to exercise their rights to elect new committee members to manage the affairs of the Gule ILG.
30. Based on materials placed before me, I find that neither the plaintiffs nor the defendants were duly authorized by their clan members to represent them in this proceedings. I find therefore, that both the plaintiffs and the defendants do not have standing in this proceedings. I find this to be an abuse of Court’s process pursuant to Order 12 Rule 40 (a) (b) & (c) of the NCR.
31. Having made this finding which is a threshold issue, it is no longer necessary for me to deal with the other two remaining issues.
(i) Application is refused.
(ii) I issue the following interim orders to be made returnable on the 17th January 2022:
- (a) Parties are directed to hold a reconciliation meeting through the Dispute Settlement Authority by no later than the 14th January 2022,
- (b) Interim orders issued on the 15th July 2021 are to remain in force until the 17th January 2022.
- (c) Parties to report back to the Court, the outcome of the meeting and for further directions and/or Orders to be issued.
(iii) Costs be in the cause.
Orders Accordingly
________________________________________________________________
Public Solicitor: Lawyers for the Plaintiffs
Kumbari Lawyers: Lawyers for the Defendants
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