N9577
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO.168 0F 2021

JOHN WAMP, President of Muglamp Rural Local Level Government
First Plaintiff

RODNEY ROT KUR, President of Mala Kinjibi Rural Local Level Government
Second Plaintiff

JERRY ANIS, President for Kotna Rural Local Level Government
Third Plaintiff
V
HONOURABLE WESLEY NUKUNDI, Member for Dei Open & Minister for Immigration & Border Security
First Defendant

MR. BATAMAI TIPI, Administrator for Dei District
Second Defendant

CATHY RIPA, Treasurer for Dei District
Third Defendant

THE MANAGER, MT HAGEN BRANCH OF BANK SOUTH PACIFIC
Fourth Defendant

Mt. Hagen: Eliakim AJ
2021: 23rd November
2022: 01st April

PRACTICE AND PROCEDURE – application to dismiss for no cause of action Order 8 Rule 27 NCR and Order 12 Rule 40(1)(b) NCR – Plaintiffs have standing - Cause of Action disclosed - Application refused. 

Cases Cited
Infraawe v Yauwe Rigong [1999] PGNC 83
Lano v Tugo (2018) N7721
PNG Forest Product Ltd -v- The State [1992] PNGLR 85

Counsel

P. K. Kunai, for the Plaintiffs
C. Kup-Ogut, for the First, Second & Third Defendants
No Appearance for the Fourth Defendant 

RULING

1st April, 2022 
1.	ELIAKIM AJ: The first, second and third defendants applied to dismiss the proceeding for not disclosing a cause of action pursuant to Order 8 Rule 27 and Order 12 Rule 40 of the National Court Rules (‘NCR’).

2.	They seek the following orders in their Notice of Motion: “This proceeding be dismissed for:

(a)	disclosing no cause of action pursuant to Order 8 Rule 27; and
(b)	Being vexatious and frivolous pursuant to Order 12 Rule 40 of the National Court Rules.”

FACTS

3.	The Local Level Government (‘LLG’) elections in 2013 for Dei District, Western Highlands Province (‘WHP’) was declared ‘failed elections’.

4.	Following the successful elections in 2019, the plaintiffs were elected as Councilors of their respective wards and subsequently, as Presidents of the three (3) different Local Level Governments in the Dei District, WHP.

5.	They were each sworn in as members of the Western Highlands Provincial Assembly on 30 August 2019.

6.	They have filed this proceeding in their capacity as Presidents of the respective LLGs, claiming that the Dei District Development Authority (‘DDA’) Board has never had a single meeting since 2019 to date, yet funds are being expended by the Authority.

7.	They plead in the OS as follows:

1.	A declaration that the failure by the First Defendant to call a meeting for the Dei Development Authority Board since September 2019 is in breach of both the letter and the spirit of the District Development Authority Act of 2014 and is therefore unlawful.
2.	Any meetings purported to have been held for Dei District Development Authority by the First Defendant between September 2019 and December 2020 is therefore unlawful, void and of no effect.
3.	An order directing the First Defendant to call a meeting for Dei Development Authority as required by the District Development Authority Act 2015 forthwith.
4.	Until further orders an interim order to freeze the bank account for Dei District Development Authority conducted at the Bank South Pacific Limited, Mt Hagen Branch in Account No: 7007895068 and 10000878758.
5.	Costs of this proceeding.
6.	Such further orders the Court may think fit”. 

DEFENDANTS’ SUBMISSION 

8.	In support of its application, the defendants rely on the sworn affidavit of Batamai Tipi, the District Administrator (‘DA’) of Dei District. 

9.	The defendants raise the followings grounds to support its application:

(i)	Plaintiffs lack standing as they have not provided any resolution from their respective Councilors to sue. 
(ii)	Defendants are inaccurately named.
(iii)	Bank is not properly named.
(iv)	No evidence of functions under s.5 of the DDA being breached.
(v)	Omission of the State as a party makes this proceeding incomplete and incompetent for want of form.
(vi)	Omission of the Department of Finance 
(vii)	No evidence that the Authority has violated or breached the Financial Instructions.
(viii)	Exemptions given by Finance Secretary
(ix)	Undertakings filed does not bear the common seal of each of the LLGs.

10.	Mr. Kup-Ogut for the defendants submits on both the pleadings and the relief sought.  
11.	He asked as to where the power to call meetings by the Member comes from? He answered his own question stating that the Open Member does not have any powers until he sits as Chairman of the Board.  That is the only time he exercises that power. He also submits that the Member has different roles which are invoked by different laws.

12.	He says the claim is against the first defendant and not the other defendants and as such, they should not be included. 
  
13.	Further, he submits that in any event, Secretary for the Department of Finance, Dr. Ngangan authorized the Chairman’s extension of financial powers in order for the DDA to expend monies. He made reference to the first plaintiff, Mr. Wamp’s affidavit which attaches a letter dated 27 May 2016 from the Secretary, Department of Finance.

PLAINTIFFS’ RESPONSE

14.	The plaintiffs relied on the three sworn affidavits filed by each of them.

15.	Mr. Kunai for the plaintiffs submitted that the Plaintiffs are duly elected Presidents or Heads of their respective LLGS and they do not require a resolution from their LLGs to file this proceeding. Further by operation of the law under s.12(1)(b) of the DDA Act, as Heads of their LLGs, they are members of the DDA Board.

16.	Mr. Kunai clarified at the outset that the case is actually against the first Defendant who is the current sitting Member for Dei Open and Chairman of the DDA Board. The DA and BSP Bank are only named as necessary /nominal parties. 
 
17.	He submitted that the Member has a legal duty or obligation to call meetings but he has failed since 2019, to call a meeting of the board. He therefore is acting outside of the law as his failure to call board meetings defeats the purpose of the DDA Act.  

18.	There has not been one single meeting called by the defendant.  The plaintiffs have done personal representation to the Minister in Port Moresby. 

19.	Mr. Kunai further submits that this is not a case which will require the court to exercise its power to stop the case at this stage as there is an arguable case and the plaintiffs have Standing thus the matter should be allowed to go to a full hearing.  Furthermore, the member has chosen not to file or depose an affidavit in response to the plaintiffs’ allegations. It is not proper for the DA/ CEO to speak for him with the attempt of defending him.

20.	Mr. Kunai submits that the Originating Summons does disclose a reasonable cause of action. 

THE LAW AND ITS APPLICATION TO THE FACTS

21.	A cause of action is disclosed once a plaintiff alleges a violation of a right he has in law and the facts giving rise to the suit. (Infraawe v Yauwe Rigong (1999) PGNC 83; Lano v Tugo (2018) N7721).

22.	The defendant claims that the entire proceeding be dismissed pursuant to Order 8 Rule 27 for disclosing no cause of action; and Order 12 Rule 40 of the NCR specifically for being vexatious and frivolous’.

23.	O. 8 R.27 states:

“Where a pleading –
(a)	Discloses no reasonable cause of action or defence or other case appropriate to the nature of the pleading; or
(b)	Has a tendency to cause prejudice, embarrassment or delay in the proceedings; or
(c)	Is otherwise an abuse of the process of the Court,
the Court may at any stage of the proceedings, on terms or otherwise, order that the whole or any part of the pleading be struck out”.

24.	The leading authority is PNG forest Product and others.  Sheehan J discusses the application of this Rule as to what constitutes a reasonable cause of action.

25.	“The jurisdiction of the court under Order 8 Rule 27 is to see if the pleading plead an almost incontestably bad cause of action which cannot possibly succeed and cannot be cured by amendments”. (PNG Forest Product Ltd -v- The State [1992] PNGLR 85).

26.	It is only in exceptional circumstances that this Court would drive a plaintiff or defendant from the judgment seat and deny him or her the opportunity to be heard. This can only be done when the pleadings are incurably bad and stand no chance of success. (Lano v Tago supra).

27.	Order 12 Rule 40(1)(b) of the NCR states: 

“(1)      Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings:………..
(b)      the proceedings are frivolous or vexatious;…….... the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”

28.	The court has inherent powers and a duty to protect itself and its processes from:

(i)	frivolous and vexations litigants; and
(ii)	frivolous and vexations claims.

29.	Are the plaintiffs in this proceeding frivolous and vexations litigants? Obviously not in my view. Each of the three plaintiffs have been bestowed the lawful and mandated authority by their people, to represent them as Heads or Presidents in the respective Local Level Governments.

30.	Further, the defendants have taken issue with the plaintiffs’ standing. However, counsel did not refer the court to any laws and or regulation that require an LLG resolution authorizing its LLG Head to sue in that capacity. This argument is therefore unsubstantiated and must fail.

31.	Is the claim frivolous and vexatious? The plaintiffs are seeking declaratory and injunctive orders.  The pertinent issue pleaded in the Originating Summons is that the first defendant has breached and continues to breach the DDA Act by failing to call a Board meeting since September 2019. In the event that a breach is proven, then the first defendant be ordered to call an immediate meeting and an order freezing the DDA bank account with the BSP Bank pending the board meeting.  

32.	Section 28 of the DDA Act provides for the calling of board meetings.  Subsection 2 states: “A Board shall meet at least once in every quarter on such dates and at such times as the Chairperson decides in consultation with the Secretariat”. (underlining mine).

33.	I take judicial notice that there are four (4) quarters in one calendar year. “Once in every quarter” therefore translates into four quarters, thus four meetings in a year. 
34.	Section 28 of the Act therefore makes it mandatory for the DDA board to meet four (4) times in a calendar year. The meeting dates and times are as decided by the Board Chairman who pursuant to s.12 (1)(a) of the DDA Act, is the Member of Parliament representing the open electorate. In this instance, the current member representing Dei Open Electorate is Honorable Wesley Nukundi, the first defendant. 

35.	The plaintiffs claim that Mr. Nukundi in his capacity as Chairperson of the authority, has breached the Act by failing to hold or organize a Board meeting since September 2019.

36.	The first defendant will therefore need to provide evidence of Dei DDA Board Meetings called and held from the period 2019 to date.

37.	Mr. Tipi’s affidavit in support of this application, has not provided any evidence of any board meetings for the authority held since August 2019 to the date of hearing the application. Rather he deposes at paragraph 44 that a board meeting was held in 2019 but in July, prior to the election of the Plaintiffs. He stated that he will provide a copy of the Meeting Minutes should the matter go for trial.
 
38.	He goes further by giving evidence that the Dei District Authority has been rolling out district programs based on the latest financial instructions from the Department of Finance. Annexture I of his affidavit is the Financial Instruction No.05/2020 from Secretary, Department of Finance on the Management of Funds for Covid – 19 Emergency Response. 

39.	Mr. Tipi further justifies at paragraph 50 and 51 of his affidavit that powers to fund implementation of projects was vested in the CEO, Dei District Authority by the Secretary, Department of Finance in 2016 when the issue of failed elections were brought to his attention. This instruction was through a letter from Secretary, Finance Department to the first defendant dated 27 May 2016. He states that he is not aware of this instruction being withdrawn.

40.	The letter at paragraphs 4, 5 and 6 reads:

“The Secretary for Finance under Section 4(1) of the PFMA, 1995 has control and direction of all matters relating to the financial affairs of the State hence subject to specific direction given to him by the Minister.
JDBPC must meet and approve projects to be implemented based on its 5 year development plan.  CEO of the DDA must actively involve including the DT (District Treasurer) to ensure procurement process are complied with.  DA/CEO can authorize the claim as section 32 Officer in compliance FI 2/2014 and F1 2/2016.
Hence, I approve as Secretary of Finance under s.4(1) of the PFMA that LLGSIPs funds for the two failed LLGs can be expended for ward development projects as per the FI 2/2014 and FI 2/2016 on the administration of SIP Funds.”

41.	Whether or not the instructions and conditions from the Secretary, Department of Finance, were complied with or not is irrelevant for purposes of the application before me.  However, I do take note that the instruction was given in 2016 as a result of the failed LLG elections.  The plaintiffs in this matter are concerned with the period from September 2019, when they were successfully elected as LLG Presidents, to the date of the application. 

42.	Apart from Mr. Tipi’s justification of the expenditure of funds without a Board resolution, he deposes at paragraph 49 of his affidavit that “The meetings of the Board of the Authority are held on a need by need basis in any given year during a normal year”.  This evidence is false, misleading and is invalidated by s.28 of the DDA Act which legally requires one board meeting per quarter of any given year. 
  
43.	In addressing the defendants argument that the naming of the defendants are incorrect and that the State should be included as a party.  The DDA Act stipulates at s.4 that the Authority may sue and be sued in its corporate name. As to the correct naming of the parties, I adopt what was held in the PNG Forest Product Ltd case and find that the pleading pleaded in the Originating Summons is not incontestably bad and can be cured by amendments.

44.	Furthermore, I do not find that the plaintiff’s claim is without reason nor instituted for any wrongful purpose. In my view, they are not using the legal system to harass or embarrass the first defendant in any way. 

45.	The plaintiffs as heads of their respective LLGs and as DDA Board members with voting rights, have purportedly had their rights and that of their people within the Dei District, violated by the purported failure of the first defendant to call the legally required quarterly board meeting, have filed this court proceeding which in my view discloses a proper and reasonable cause of action.   
  
46.	I therefore find that the plaintiffs have standing to sue in their capacity as duly elected Presidents of their respective LLGs and they have disclosed a reasonable cause of action.  Further, they are not frivolous and vexatious litigants nor is their claim frivolous and vexatious. 

47.	I therefore refuse the defendant’s application with costs.

 ORDERS

48.    The Court orders as follows: 

1.	The First, Second and Third Defendants’ Notice of Motion filed 21st September 2021 is refused.
2.	The First, Second and Third Defendants shall pay the plaintiff’s costs of this interlocutory proceeding, to be taxed if not agreed.
3.	The matter is listed for Directions Hearing on 04 April 2022 at 9.30am.
4.	Time shall be abridged to time of settlement to take place forthwith.
________________________________________________________________
Kunai & Co. Lawyers:	Lawyers for the Plaintiffs 
Kup & Co Lawyers:	Lawyers for the Defendants