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Noko Yuku Development Corporation Ltd v Hela Provincial Government [2022] PGNC 415; N9811 (2 August 2022)

N9811

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 11 OF 2022 (IECMS-CC1)

BETWEEN:

NOKO YUKU DEVELOPMENT CORPORATION LIMITED

-First Plaintiff-

AND:

HGCP HOLDINGS LIMITED

-Second Plaintiff-

AND:

BULARO HOLDINGS LIMITED AND TUMBI TIMBIAGO INVESTMENTS LIMITED

-Third Plaintiff-

AND:

YUKU HIRUA INVESTMENTS LIMITED

-Fourth Plaintiff-

AND:

TUGUBA TABU INVESTMMENT LIMITED, NA-TAKO CONSTRUCTION LIMITED, GREEN BASE LIMITED, MORBA INVESTMENT LIMITED, MALI INVESTMENT LIMITED AND HILA PRO INVESTMENT LTD

-Fifth Plaintiffs-

AND:

HELA PROVINCIAL GOVERNMENT

-First Defendant-

AND:

INDEPENDENT STATE OF PAPUA NEW GUINEA

-Second Defendant

Waigani: Tamade AJ

2022: 2^nd June, 2^nd August

Cases Cited

The following cases are cited in the judgement:

Golobadana No 35 Ltd v Bank of South Pacific Ltd [2002] PGNC 36; N2309
Robinson v National Airlines Commission [1983] PGNC 46; [1983] PNGLR 476

Counsel:

Mr Justine Haiara, for the Plaintiff

Mr B Koae, for the Fourth Plaintiff

Mr Justin Wohuinangu, for the First Defendant

Ms Zara Waiin, for the Second Defendant

2^nd August 2022

1. TAMADE AJ: This is an application filed by the First Defendant, Hela Provincial Government by way of a Notice of Motion filed on 18 February 2022 to set aside interim orders granted on 8 February 2022 and to dismiss these proceedings pursuant to Order 12 Rule 1 and Rule 40 of the National Court Rules.
   
2. I address firstly in this ruling several objections raised by Mr Haiara of the First and Fifth Plaintiffs in relation to the competency of the Notice of Motion filed by the First Defendant and affidavit material in support of the application respectively before this Court.
   

Challenge to the Notice of Motion filed 18 February 2022

3. Mr Haiara of the Plaintiffs has raised the issue that the Notice of Motion filed by the First Defendant seeks to set aside the Orders of the Deputy Chief Justice made on 8 February 2022 which Mr Haiara says by effluxion of law has already lapsed and is no longer of any relevance, force or effect.
   
4. Having read the Orders of the Court and the endorsements on the Court file, the Court Orders the subject of this application were made on 4 February 2022 and were made by this Court as presided over by the Deputy Chief Justice, Justice Ambeng Kandakasi on 4 February 2022. The orders were made ex parte as only Mr Haiara was the counsel for the Plaintiffs before the Court and orders were made in the absence of the Defendants. The Orders of 4 February 2022 were therefore sealed on 8 February 2022 by Haiara’s Legal Practice. Those are the orders the First Defendant is challenging that they were made ex parte and therefore they should be heard inter-parte for the Court to decide whether they should continue or not in terms of injunctive orders granted in those orders.
   
5. Term 2 and 3 of the Court Orders of 4 February 2022 is in the following terms:
   

ii) The First Defendant and or it’s servants, agents, employees or associates are restrained and injuncted from dealing with, paying out or issuing IDG Funds in the sum of K30 million paid by the Bank of Papua New Guinea cheque No. 080685 dated 12 January 2022 pending the hearing and determination of these proceedings.

iii) The First Defendant shall be at liberty to apply to set aside or a variation of the restraining orders on filing of appropriate application within 48 hours’ notice.

6. On 16 February 2022, His Honour the Deputy Chief Justice again presided over the matter and amongst other orders directed that; “Counsel for the First Defendant shall file and serve his clients anticipated Notice of Motion with supporting affidavits by no later than 18 February 2022. The First Defendant has complied accordingly with the direction of the Court and has filed their Notice of Motion on 18 February 2022 seeking to set aside the injunctive orders on the Orders of 4 February 2022 and also seeking to dismiss these proceedings.
   
7. Mr Haiara’s submissions therefore that the orders have by effluxion of law have already lapsed and is no longer of any relevance, force or effect is misleading to this Court. Counsel has a very high duty not to mislead the Court. Mr Haiara strongly and vehemently argued this application on this ground without pointing out to this Court the full terms of the Court Orders of 4 February 2022 and again the Orders of the Court on 16 February 2022. The application by the First Defendant before this Court is properly before this Court as it challenges orders made ex parte and also it is filed in compliance with Orders of the Court by the Deputy Chief Justice. Mr Haiara’s submissions are therefore refused as it is misleading, to say the least.
   

Affidavits of Mr Justine Wohuinangu and Hon. Philip Undialu

8. Mr Haiara also submits that the affidavit of Mr Wohuinangu as counsel for the First Defendant and Honourable Mr Philip Undialu as Governor for Hela Province contain uncorrected falsehoods and contain inadmissible evidence and are hearsay and should not be relied upon.
   
9. Mr Haiara makes scathing allegations against Mr Wohuinangu as counsel for the First Defendant that Mr Wohuinangu has abused his position and has seriously misled the Court by failing to adduce into evidence a letter of a Mr Waralo in a letter dated 1 December 2021, in Mr Haiara’s submissions, he refers to Mr Wohuinangu as “self-appointed as a State lawyer...”. This to my mind is uncalled for and unethical in my view. Lawyers are not only advocates for their clients, they hold an ethical profession that demands courtesy and respect to the Court and towards other lawyers as members of the bar. Mr Haiara seems to take stabs at Mr Wohuinangu on a personal level in his submissions not only in his submissions as to Mr Wohuinangu’s Affidavit but in his general conduct of the matter and representing his client. This uncalled-for behaviour should be called out by the Court and Mr Haiara should extend an apology to Mr Wohuinangu as both are senior members of the bar. There is a fine line between vigorously putting up a fight for your client and stepping over the line to conduct that is aberrant. I say nothing further in that regard.
   
10. I take the objections to the contents of the Affidavit of Mr Wohuinangu filed on 18 February 2022 and I accept the contents of his affidavit where he is expressing his own opinion as counsel for the First Defendant in regard to these proceedings in his belief and bringing to the attention of the Court NEC Decisions which are documents that are also within the Plaintiffs’ knowledge and possession. Matters as to specific facts on instructions from his client are matters that the Court will not place much weight on it until it is tested at the trial of the matter. Matters as to a reference to OS No. 196 of 2013 are matters relating to decisions of the Court that are in the public domain; therefore, I will accept those matters.
    
11. In regard to the Affidavit of Honourable Mr Undialu, I find that matters deposed to in his Affidavit are matters within his knowledge be that they are on advice from his lawyers and or from the office he holds, I accept the matters deposed therein. The Plaintiffs objections in this regard are therefore refused.
    

Notice of Motion filed 18 February 2022

12. On 4 February 2022, the Plaintiffs obtained amongst other orders from this Court orders in the nature of restraining orders to restrain Hela Provincial Government the First Defendant from dealing with, paying out or using Infrastructure Development Funds (IDG) funds in the sum of K30 million paid to the First Defendant from the State.
    
13. In the Affidavit of Mr Leo Pami sworn on 31 January 2022 and filed on the same date, Mr Pami who is a shareholder and director of the Plaintiff company states that he is from Hedemari village in South Koroba Local Level Government in the Koroba District in Hela Province. Mr Pami states that the Hides PDL1 Petroleum Project and PNG LNG Project affect South Koroba LLG and that the South Koroba LLG is a party to the PNG LNG Project at the time when the UBSA and the LBBSA were signed prior to Hela Provincial government coming into existence and therefore Hela Provincial Government was not a party to those agreements, though the agreements make reference to affected provincial governments which in my mind include Hela Provincial Government.
    
14. Mr Pami refers to the legal status of the IDG that under the UBSA, the State agreed to provide an IDG of K1.2 billion for a ten-year period commencing 2010 in accordance with section 173 of the Oil and Gas Act. Mr Pami refers to an NEC decision No. 119/2021 which approved the establishment of the Expenditure Implementation Committee (IEC) as under the Oil & Gas Act to screen and vet projects under the IDG.
    
15. Mr Pami states that on or about November of 2012, he submitted a proposal under his company for funding to build a rural hospital at Hedemari village in South Koroba LLG in Hela Province. He then followed up with the proposal with the office of the Prime Minister and said that his company’s proposal was referred from the Office of the Prime Minister to Secretary for the Department of Petroleum. The First Plaintiff’s project proposal was screened by the EIC and was rejected for reason that it was outside the Hides PDL1 Project. Mr Pami therefore takes issues with the rejection of his company’s proposal by the EIC stating that Hedemari village is within South Koroba LLG and is within Hides PDL1 area.
    
16. Mr Pami however goes further to state that he was aware that the EIC was to meet and deliberate on project proposals submitted by various project proponents within Hides and for Hela however it came to his attention that the State had paid to Hela Provincial Government K30 million on or about 12 January 2022 without EIC approval and without identifying any projects to be developed by Hela Provincial Government with this payment. Mr Pami states in his evidence that this payment contravenes the NEC Decision No. 119/2021 and section 173 and 178(3) of the Oil and Gas Act and relevant clauses of the UBSA and the Hides PDL 1 LBBSA. Mr Pami claims further that Hela Provincial Government though it is not a party to the UBSA and the LBBSA, it had received substantial IDG funds over the past 10 years commencing 2010 however he makes serious allegations on Hela Provincial Government that it had nothing to show for those IDG funds. He therefore seeks that Hela Provincial Government and the State give an account of the IDG funds received in the past and the projects delivered under those IDG funds.
    
17. The Plaintiffs grievances seem to be fuelled by a letter dated 1 December 2021 from a Mr Victor Waralo, Programme Manager, IEC Secretariat to Chairman and Secretary of DNP&M Mr Koney Samuel. This letter was not within the knowledge of Mr Pami when his lawyers made the application for restraining orders on 4 February 2022. In a later Affidavit filed by Mr Pami on 15 March 2022, he states that his company’s proposal for IDG funding was endorsed by the late Mr Anderson Agiru as the previous Governor for Southern Highlands when his LLG was within South Highlands prior to Hela coming into existence in 2009. He states without any letters or documents in evidence that the Prime Minister in December 2009 wrote to then Minister for National Planning Hon. Mr Paul Tiensten to release MOA project funds for listed projects under the PNG LNG one of which is the Plaintiff’s projects which had been approved for K10 million. Mr Pami states that despite the Prime Minister’s letter in support of his company’s proposal, the funding was not forthcoming. There is no evidence in Mr Pami’s affidavit of such a letter from the Prime Minister.
    
18. Mr Pami also refers to a letter by the then Administrator of Southern Highlands, Mr William Powi in a letter dated 10 July 2010 following up on the matter in a letter to the Secretary for Department of Commerce and Industry and a letter from Mr William Bando the then CEO of Hela Transitional Authority in a letter dated 6 April 2011 in support of the proposal for the Hedemari Rural Hospital and also a letter from Mr Lemson Mapira in a letter dated 11 November 2010 in his capacity as spokesman for Hides Special Authority and other letters in support of his proposal however there are no evidence of those letters in his Affidavit.
    
19. Mr Pami was informed on 13 December 2021 by a Mr Wes Tangu, an officer from DPE that the Department was going to do payments for IDG, and MOA funds and that the Plaintiff’s proposal was vetted and approved for IDG funding for less than K7.5 million. This part of Mr Pami’s evidence which is largely hearsay does not have any letter or evidence approving the funding for the First Plaintiff’s proposed project.
    
20. Mr Pami then made several trips to and from Tari to Port Moresby in anticipation of the payment for his company’s proposal however this was not forthcoming until he found out that K30 million was paid out as IDG payment to Hela Provincial Government. He then gave instructions to his lawyers to file these proceedings.
    
21. On 7 March 2022, after the Court had granted the restraining orders on 4 February 2022, Mr Pami then proceeded to enquire with the EIC Secretariat as to the status of the First Plaintiff’s application for IDG funding. Mr Pami states that a Mr Victor Waralo who is a Programme Manager with the EIC Secretariat told him that the First Plaintiff was granted IDG funding for the Hedemari Mini Rural Health Centre along with other proposals submitted by other landowner companies within Hides PDL1, Hides PDL7, Angore PDL8 and Juha PDL9 at a total cost of K30 million. Mr Pami states that Mr Waralo gave him a copy of a letter dated 1 December 2021 written by Mr Waralo to the Chairman of the EIC.
    
22. At this juncture, I take the objections raised by Mr Wohuinangu who objects that Mr Pami is not the author of this letter nor is he the recipient of this letter. The annexure marked LP2 in the Affidavit of Mr Leo Pami sworn on 15 March 2022 and filed on 15 March 2022 is a letter purportedly from a Mr Victor Waralo, Program Manager- Hides, Juha & Angore from the Department of Petroleum and Energy to the Chairman of the EIC. Mr Waralo states in this letter that the EIC Secretariat had thoroughly vetted these project submissions and highly recommend these projects to the EIC for possible funding as DPE does not receive appropriate budget to fund these projects. From the purported letter, it is Mr Waralo’s opinion that “over the years when affected Provincial Government took control of IDG and HIPG funds, these genuine landowner leaders had missed out as Provincial Government had entertained their political cronies only.”
    
23. Annexure LP3 in the Affidavit of Mr Pami encloses a list of a total of 10 Nominated Project Proponent’s which includes the First Plaintiff’s proposal for Hedemari Mini Rural Health Centre Construction in the recommended sum of K7.5 million and which seeks the approval of the Chairman of the EIC, the Chairman of the EIC’s signature is missing from that document.
    
24. Mr Pami’s project proposal for a Rural Health Centre was therefore never approved by the EIC. Mr Waralo’s purported letter is only a proposal letter to the Chairman of the EIC and having heard Mr Wohuinangu on his objections to this letter and pursuant to section 84(2) of the Evidence Act, Mr Pami is not the author of this letter and nor is he the recipient of this letter in which the letter is addressed to and therefore I will uphold Mr Wohuinangu’s objections that this letter is inadmissible.
    
25. What then are the Plaintiffs right to continue to maintain interim injunctive orders granted on 4 February 2022?
    

Injunctive Orders of 4 February 2022

26. The principles for the grant and or continuity of injunctive orders is well settled in this jurisdiction. The case of Golobadana No 35 Ltd v Bank of South Pacific Ltd^[1] sets out the principles for the Court to consider in the grant or in the continuity of interim injunctive orders as follows;
    

“The principles upon which a Court could grant an interlocutory injunction are well settled. The Deputy Chief Justice discussed the proper principles governing the grant or otherwise of interlocutory injunctions going by the leading English case of American Cyanide Company v. Ethicon Limited [1975] UKHL 1; (1975) 1 All E.R. 504, a decision of the House of Lords. The Deputy Chief Justice correctly summarised the principles as follows:

"1. Is the action not frivolous or vexatious? Is there a serious question to be tried? Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial? All these questions laid down the same test. See: Smith v. Inner London Education Authority (1978) 1 All E.R. 411 at 419;

2. The Court must then consider whether the balance of convenience lies in favour of granting or refusing interlocutory relief;

3. As to the balance of convenience, the Court should first consider whether if the applicant succeeds he would be adequately compensated by damages for the loss sustained between the application and the trial, in which case no interlocutory injunction should normally be granted.

4. If damages would not provide an adequate remedy, the Court should then consider if whether the applicant fails the defendant would be adequately compensated under the applicant’s undertaking in damages, in which case there would be no reasons on this ground to refuse any interlocutory injunction.

5. Then one goes on to consider all the other matters relevant to the balance of convenience, an important factor in the balance should, other things being even, preserved the status quo; and

6. When all other things are equal it may be proper to take into account in tipping the balance the relative strength of each party’s case as reviewed by the evidence before the Court hearing the interlocutory application."

27. The interest of justice principle is another consideration for the grant of interim injunctive orders which in itself is an equitable remedy. The pertinent question for the Court to consider in this case is whether there is a serious question to be tried amongst other considerations. The Plaintiff has proceeded by way of an Originating Summons seeking declaratory relief as can be seen in the Amended Originating Summons filed on 5 May 2022 in regard to declarations as to IDG’s under the PNG LNG Project UBSA and Hides PDL1 LBBSA and other similar Benefit Sharing Agreements and also seeks a declaration that the Hela Provincial Government is not authorized to receive directly from the State IDG funds under the various Benefit Sharing Agreements and the Plaintiffs also seek declarations as to the K30 million paid to the Hela Provincial Government that it is contrary to section 178 of the Oil & Gas Act and the UBSA and the LBBSA and that it should be vetted and approved by the EIC and seeks consequential orders that the K30 million held by the Hela Provincial Government be transferred to the National Court Trust Account to be paid to the 10 project proponent’s companies vetted and approved by the EIC on 1 December 2021.
    
28. Mr Wohuinangu has submitted that the First Plaintiff’s grievance lies in the manner in which the First Plaintiff’s project proposal for the Hedemari Rural Hospital was rejected by the EIC as it was outside PDL1. Mr Wohuinangu submits that the First Plaintiff aggrieved by this should file a judicial review to challenge the process in which the EIC arrived at and or the consideration the EIC took into account in rejecting his company’s proposal.
    
29. I find that there is no evidence before this Court that the First Plaintiff and any of the Plaintiffs have an approved proposal for IDG funding or any funding at all in regard to their various project proposals and there is no evidence of any right they may have to the K30 million paid to the Hela Provincial Government as strenuously contested in these proceedings.
    
30. The purported letter the First Plaintiff relies on dated 1 December 2021 by a Mr Victor Waralo is a purported letter to the EIC Chairman recommending the Plaintiffs for the EIC to approve their proposal however it is ruled out to be inadmissible and the Plaintiffs all have no legal right to protect in these proceedings as none of their project proposals were approved.
    
31. In the case of Robinson v National Airlines Commission^[2] , the Court stated the following with emphasis underlined:
    

“ An interlocutory injunction, the purpose of which is to preserve the status quo, will be granted where just and convenient: the plaintiff must prove that he has a serious, not a speculative case, which has a real possibility of ultimate success and that he has a legal or equitable right, title or interest which might be jeopardized if the injunctive relief were not granted: it is then for the court to determine whether nonetheless the injunction should not go taking into account such factors as the adequacy of damages as a remedy, the possibilities of alternative remedies, whether there has been any laches or delay, the strength of the grounds of defence, what if any undertakings the defendant is prepared to give and most importantly, hardship and the balance of convenience.”

32. I find that the Plaintiffs all have no legal right seeking to be protected in these proceedings. The Plaintiffs case are not close to being speculative, they have missed the mark of being mere speculations and are really a misconceived and misleading ascertains harping on the opportunity to pull a wool over the eyes of the Court in my firm opinion. The Court should be weary of such claims to protect its own processes. I uphold the submissions by Mr Wohuinangu that if the First Plaintiff is aggrieved by the decision by the EIC to reject his company’s proposal for a rural health hospital, it should file a judicial review proceeding challenging the decision of the EIC.
    
33. It follows that the interim injunctive orders granted on 4 February 2022 and entered on 8 February 2022 is dissolved and set aside.
    

The merits of the substantive proceedings

34. Mr Wohuinangu has sought in his client’s application that alternatively, these proceedings should be dismissed for being an abuse of process contrary to Order 12 Rule 1 and 40 of the National Court Rules because it fails to show any reasonable cause of action, it is frivolous and vexatious, and it is an abuse of process of the Court. Having found that the Plaintiffs do not have a serious question to be tried before this Court in the first leg of Mr Wohuinangu’s application in regard to the continuity of the injunctive orders granted on 4 February 2022, has also found that the Plaintiffs do not have a right that needs to be protected in these proceedings, it, therefore, amounts to the Plaintiffs failing to have a cause of action arguable before this Court. They have mounted a claim that is misleading and deceptive in my firm view as they do not have by any evidence and or right to any approved funding for any of their project proposals from the EIC.
    
35. The First Plaintiff aggrieved by the decision of the EIC to reject his company’s proposal to build a rural hospital from the IDG should proceed by way of a judicial review however he has used the reason being the K30 million paid to Hela Provincial Government to raise issues of impropriety against the First Defendant in order to seek an injunctions to restrain the Hela Provincial Government and hold the First Defendant to ransom so to speak by using these proceedings in an attempt to divert those payments to the Plaintiffs and or to compel the Defendants to an out of court settlement on a foundation lacking in merit and amounting to deception is blatantly wrong and this act is condemned by this Court.
    
36. The proceedings are a more than farcical, they are a sham and should be dismissed. There is therefore no arguable or meritorious case before this Court. These proceedings shall be dismissed accordingly.
    
37. I therefore make the following orders:
    
    1. The injunctive orders granted on 4 February 2022 are dissolved and set aside.
    2. These proceedings are therefore dismissed in its entirety.
    3. The Plaintiffs shall each meet the Defendants’ costs on a solicitor client basis for mounting proceedings that are a sham.
       

Orders accordingly.

________________________________________________________________
Haiara’s Legal Practice : Lawyers for the First and Fifth Plaintiffs

Gileng & Co Lawyers : Lawyers for the First Defendant

Office of the Solicitor General : Lawyers for the State

^[1] [2002] PGNC 36; N2309 (11 November 2002)

^[2] [1983] PGNC 46; [1983] PNGLR 476; N476 (28 May 1983)