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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 691 OF 2017
BETWEEN
KURUBU IPARA, JOHN ONDALANE & RUBEN NALEP as Internal Interim Trustees of the Porgera SML Landowners Children’s Investments
Fund representing the SML Landowners
First Plaintiff
AND
ELIZABETH UMANGE in her capacity as Trustee of the Coordinator of the Porgera SML Children’s Investment Fund
Second Plaintiff
AND
CHRISTOPHER TRAINOR as his capacity as Trustee of the Porgera Landowners Children’s Investment Fund representing
First Defendant
AND
MASO KARIPE, MAX PIAWEN & CLINCH YANDAPAKE as purported elected Trustees of Porgera SML Landowners Children’s Investment
Fund presenting the SML Landowners
Second Defendants
Waigani: Makail, J
2020: 1st July
2022: 4th February
TRUST – Trustees – Election of – Elected at Annual General Meeting – Dispute of – Procedure for calling and chairing of Annual General Meeting regulated by Trust Deed – Annual General Meeting ordered by Court – Conduct of trustees – Lack of corporation – Evidence of sabotage, obstruction, defiance, suppression and stubbornness – Unclean hands – Inequity – Entitlement to relief sought – Relief sought refused – Proceeding dismissed – Clauses 8.7, 8.9, 10.1, 10.2 & 10.3
Cases Cited:
Sehazuha Land Group Incorporated v. Iruna Roga Kila as Registrar of Incorporated Land Groups & The State (2019) N7768
Counsel:
Mr. J. Haiara, for Plaintiffs
Mr. J. Brooks, for First Defendant
Ms. J. Nandape, for Second Defendants
JUDGMENT
4th February 2022
1. MAKAIL, J: By an originating summons filed on 1st September 2017 the plaintiffs seek the following orders:
“1. A declaration that the purported AGM conducted by MR CHRISTOPHER TRAINOR, the First Defendant on 25th August, 2017 at Porgera Enga Province was not in accordance with the Rules of the Porgera SML Landowners Children’s Investment Fund Trust Deed (The Trust Deed) therefore null and void.
(a) 24 recognized SML landowners’ clan agents and their alternates,
(b) the parents of the beneficiaries whose names are registered in the Register of the Parents for periods of 2014 - 2017
Background Facts
2. These orders are being sought because of a long-standing dispute over the trustees of Porgera Landowners Children’s Investment Fund (Trust Fund) which Trust is responsible for managing and dispersing some of the royalty money paid by Porgera Joint Venture (now Barrick) for school fees for children of the SML of the Porgera Gold Mine.
3. It was not disputed that there had not been an Annual General Meeting (AGM) of the Trust Fund since 2005 until the AGM now under challenge in this legal proceeding. Since 2005 the Trust had fallen into disarray.
4. The Trust Fund has been the subject of several legal proceedings dating back to 2011. In 2011 Hartshorn J first ordered an AGM to be held for the Trust. No AGM was held following the orders of Hartshorn J in 2011.
5. The Trust Fund is governed by the terms of the Trust Deed. Pursuant to clause 10.1 of the Trust Deed, there are six trustees. Three of them are landowner nominee trustees who shall be appointed at an AGM of the Porgera SML Landowners Association. They are referred to as internal nominee trustees. The current ones are the second defendants.
6. The other three nominee trustees come from outside and are referred to as external nominee trustees. One is State nominee trustee, (Donald Hehona) the other is from PJV (now Barrick) (first defendant) and the last is a Porgera Development Authority (PDA) nominee trustee (second plaintiff).
7. The term of the internal nominee trustees is three years and external nominee trustees remains at the discretion of their employers.
8. In 2013 the first defendant was appointed as a trustee. Upon being appointed the first defendant first appointed Price Water Coopers (PWC) to audit the Trust funds and second, attempted to convene an AGM.
9. At that time there were no internal nominee trustees or landowner elected trustees and to comply with the Trust Deed so that cheques were able to be signed in accordance with the Trust Deed, the internal nominee trustees had to be elected and one of the reasons to hold the AGM was to elect internal nominee trustees.
10. In 2013 the lead plaintiff Mr Kurubu Ipara commenced legal proceedings in OS No 685 of 2013 to challenge the convening of an AGM and in the interim, sought an order to restrain the holding of the AGM.
11. On 25th October 2013 Kariko J ordered the holding of the AGM. This was the second order of the Court requiring an AGM to be held. On 9th July 2014 Mr Ipara filed an affidavit seeking the appointment of “interim trustees”.
12. On 13th August 2014 the National Court ordered by consent that a meeting of the 23 SML landowner agents be held to elect interim trustees and thereafter to quickly convene an AGM so that the landowners could elect their own trustees. This was the third order of the Court.
13. On 28th August 2014 a meeting was held in Port Moresby and the plaintiffs were elected as “interim trustees”.
14. There was further legal proceedings OS No 474 of 2015 commenced by the interim trustees to sort out a dispute over money due to the Trust Fund which was eventually discontinued on 25th September 2015 following an order of 23rd September 2015 which amongst others, ordered an AGM to be held within two months. This was the fourth order for the parties to hold an AGM.
15. That was not the end of the matter. There was a subsequent application to set aside the order of 23rd September 2015 which was later withdrawn and later refiled on 20th November 2015.
16. Another application was filed on 20th November 2015 to stay the order f 23rd September 2015. There was even a Supreme Court appeal in SCA No 132 of 2015 was filed which was later, withdrawn.
Court Ordered AGM – OS No 685 of 2013 Proceeding
17. To cut the long story short, another legal proceeding OS No 455 of 2017 was commenced and was dismissed and finally, the plaintiffs commenced proceeding OS No 685 of 2013 which led to Kariko J ordering parties to hold an AGM be held before 31st August 2017. This was the fifth order for an AGM to be held. Term four of the order is directly relevant to the holding and persons responsible for organising the AGM and reads:
“The First, Second and Third Defendants (The first plaintiffs in the current proceeding) shall also be responsible for arranging and convening the AGM in consultation with the Trust Co-ordinator, which meeting shall be held no later than 31st August, 2017 ”.
18. In compliance with the order, the first defendant prepared a notice of the AGM for approval of Mr Hehona the State nominee trustee and sent an electronic copy to him. Mr Hehona responded and whilst he did not specifically state he agreed with the format of the notice, Mr Hehona did not object and took no other action in an effort to hold an AGM from that point.
19. The first defendant had the notice placed in the Post Courier on 6th July 2017 and copies of the notice of the AGM was placed on the PDA Notice Board and other public notice boards in the Porgera area including having the Community Affairs Department at Porgera Mine had delivering copies of the said notice to all villages within the boundaries of the Porgera SML. The notice advised that the AGM would be held on 25th August 2017 as required by clauses 8.2 and 8.3 of the Trust Deed.
20. Following the publication of the notice, the first defendant received a series of emails from Mr Hehona complaining he did not want the AGM to be held at the Suyan Mining Camp. Mr Hehona said that he would rather have the meeting at either the PDA’s Office or the Porgera International School.
21. It was agreed to change the venue of the AGM from Suyan to PDA office. New notices of the change of venue of the AGM were published in the Post Courier on 22ndAugust 2017, placed on all notice boards in Porgera area and delivered to all villages within the Porgera SML area.
22. The second defendants confirmed receiving the notice and said that all landowners were well aware of the AGM. In case of any trouble and violence, like in previous AGM, the first defendant prepared a written authority form to be signed by a Principal Landowner of each sub-clan acknowledging the person name don the form as an SML Landowner who was entitled to attend the AGM in 25th August 2017. This form was in blue colour.
23. The first defendant also prepared an attendance form for the purpose of allowing beneficiaries to attend the AGM and speak at the AGM, but not to vote in the election of the SML internal nominee trustees. The attendance form was printed in green paper.
24. The first defendant also organised security at the venue and with Mr Hehona secured the attendance of an electoral officer. The first defendant also arrange for a helicopter to take Mr Hehona and the electoral officer from Mt Hagen to Porgera at 11:00 am on the day prior to the schedule AGM, and arranged for their accommodation at the Suyan Camp and a motor vehicle for use during their visit to Porgera for the AGM.
25. On the morning of 24th August 2017 the first defendant was advised by Mr Hehona that he and the electoral officer had missed their flight from Port Moresby, the first defendant asked Mr Hehona if he required the helicopter at Mt Hagen until they arrived, but Mr Hehona said that they would make their own way to Porgera.
26. The first defendant was disappointed by the delay because he had intended to provide a briefing to all concerned on the steps taken to arrange everything for the AGM and what to expect in the following day.
27. On the morning of 25th August 2017 the first defendant proceeded to the PDA office at approximately 9:30 am. Mr Hehona and the electoral officer were already there at the venue and they proceeded into the conference room for a discussion. The first defendant briefly explained what he had been doing and produced 600 voting slips for handing out to the SML landowners when voting commenced. It was decided to use the form the first defendant had produced.
28. When the second plaintiff arrived, they discussed who should be allowed to attend the AGM. Mr Hehona and the second plaintiff expressed a view that only the list of SML Landowner Agents should be used to determine who could attend the AGM. The first defendant disagreed because it was inconsistent with everything that the Court had ordered and not in accordance with the Trust Deed.
29. By then the number of SML Landowners had grown to several hundreds and at approximately 11:30 am, Mr Hehona said the AGM should be cancelled but the first defendant replied that this was not possible under the Trust Deed if a quorum was not present within one hour of the nominated commencement time of the AGM and as there were hundreds of people in attendance, it was not necessary to cancel the AGM.
30. At approximately 11:50 am, the SML Landowners settled down and only the first defendant went outside the conference room and addressed them. Mr Hehona and the second plaintiff did not. The SML Landowners in attendance produced blue forms. Mr Hehona did not object to there being no quorum and at no time did anybody tell the assembled gathering that there was no quorum and the meeting should be adjourned.
31. The first defendant called for nominations for SML Landowners trustees and there was a rush of people eagerly wanting to nominate SML Landowners. While these events were unfolding, the first plaintiffs were nowhere to be found. Once order was restored, Mr Hehona, the second plaintiff and electoral officer had left the AGM without informing the first defendant.
32. Ultimately a list of ten (10) nominations was compiled for the three positions SML Landowners trustees. As the electoral officer had left with the voting slips the first defendant was left with nothing to handout to the landowners. Fortunately, the blue forms were collected from the landowners and then used by the landowners to write numbers 1, 2 and 3 in order of their preference, with their first choice being number 1 etc. Once completed, the blue forms were collected and voted were counted.
33. Counting was conducted over night with the assistance of the Porgera District Administrator, the Laiagam and Porgera Police Station Commanders and several local police and other helpers. The results were official placed in the PDA Notice Board before Monday 28th August 2017. The results show the second defendants elected as SML Landowners trustees.
34. Aside from the AGM, the first defendant also explained that he had a Business Visa that was issued to him in Canberra on 30th May 2017 which was valid for 1 year and it was on the basis of this visa that he was in PNG and attending the AGM as the Barrick Trustee.
35. By that time, he was no longer an employee of Barrick, but on a retainer for the purpose of conducting the AGM for the Trust Fund and also so that he could attend meetings of the Mining and Petroleum Industries Investment Fund of which he was at that time, still a director.
Validity of AGM
36. The plaintiffs submitted that the calling of the AGM by the first defendant was illegal because the order by Kariko J did not say that he was the person to call the AGM or authorise him to do that. The order also did not say he was the Chairman or authorise him to chair the AGM. They relied on clause 8.9 of the Trust Deed which states:
“8.9 - The Chairman of the AGM shall be appointed by the meeting at the invitation of the Chairman of the trustees or if he or she is not present, at the invitation of a trustee nominated by the trustees for that purpose, but where the meeting fails to appoint a Chairman, the Chairman if the trustees, shall be the Chairman of the meeting”.
37. It is noted that clause 8.9 regulates the procedure for conducting an AGM, in particular how a Chairman of the AGM is appointed. In his written submissions, the plaintiffs’ counsel has accurately described how that is done. There are three ways in which a Chairman of an AGM is appointed:
(a) Appointed by the meeting at the invitation of the Chairman of the Trustees.
(b) If the Chairman of Trustees is not present, at the invitation of a Trustee nominated by the Trustees for that purpose.
(c) But where the meeting fails to appoint a Chairman, the Chairman of the Trustees shall be the Chairman of the meeting.
38. On the face of it, the Chairman of the AGM was not appointed in accordance with any of these instances and the AGM was held in breach of clause 8.9. However, it must be remembered that this was a Court ordered AGM occasioned by the repeated failed attempts to hold one since 2011.
39. The events as recounted in the preceding paragraphs of this judgment depicted a case were the plaintiffs have done everything they could to stop the holding of an AGM to elect trustees of the Trust Fund.
40. Summarising them, an AGM was held on 25th August 2017 at the PDA conference room at Porgera. The schedule time was 10’oclock in the morning. The second plaintiff and Mr Hehona attended and then left before the election of the internal nominee trustees took place. They alleged that the AGM did not start within one hour of its scheduled time as required by clause 8.7 of the Trust Deed.
41. It was also asserted that the meeting did not have a quorum by the end of the hour and the meeting should have been adjourned for a week to be held at the same time and place.
42. After the second plaintiff and Mr Hehona left, the first defendant proceeded to call for nominations and after that, votes were taken by completing a blue form. Counting took place over-night; results were tallied and announced by publication on the Notice Board. The second defendants were elected. The required quorum at an AGM was 50 but the result of the total number of votes exceeded 50. It was 1,200.
43. The first defendant explained that parties could not ill afford to adjourn the AGM because the holding of the AGM had been long overdue and caused by the plaintiffs since 2011 by the many legal proceedings they have commenced. To have it further adjourned would delay the election of the internal nominee trustees and the conflict would remain unresolved.
44. There were some 1,200 SML landowners in attendance all of who had in their possession a blue attendance form signed by a principal landowner of their respect sub-clan located on the SML certifying there were genuine SML landowners and entitled to vote at the first proper AGM held since 2005.
45. To contend that the AMG was illegal as it did not start on time, within the hour and further, that the AGM should have been attended by 24 SML Landowners’ Agents and their 48 alternate members plus two executives from PLOA and PDA is self-serving and contrived. As interim trustees there was a duty owed to the beneficiaries of the Trust Funds to uphold. The plaintiffs and Mr Hehona owed a duty to act in the best interest of the Trust and the least they would have done was to assist the first defendant to convene the AGM and wait until the group had gathered.
46. They decided to walk after an hour or so of waiting. Now they turned around and accused the first defendant of illegally holding the AGM. They must not forget that the holding of the AGM was ordered by the Court as it was another one of those attempts and if not, last attempt to get the parties together to resolve the conflict over the internal nominee trustees.
47. The plaintiffs and Mr Hehona were not only bound by their duty as trustees but also by an order of the Court to hold an AGM. They were obliged to ensure that the AGM was held, and not making excuses that it was impracticable to hold one. Of course the opportunity was presented and they should have made every effort to make it happen and it would have but they did not.
48. The task was left to the first defendant who had travelled all the way from Australia to make it happen and he successfully did, not to mention trying to round up and get some order in a group of anxious and long suffering landowners.
49. As the uncontroverted account of the events of the AGM will show, the SML Landowners had gathered for the AGM and it may be that the AGM did not start on time but there was a quorum. Then no-one objected to the first defendant chairing the AGM, no-one objected to the manner in which the election of the second defendants took place and no-one moved a motion or requested for the AGM to be further adjourned. The only objection by Mr Hehona was the quorum; who should attend and vote at the AGM which the first defendants had sufficiently explained was in order and non-issue.
50. Why complain now when they had the opportunity to attend and object to the holding of the AGM. Their conduct resembles the conduct of two opponents of a landowner group in the case of Sehazuha Land Group Incorporated v. Iruna Roga Kila as Registrar of Incorporated Land Groups & The State (2019) N7768.
51. That was a case where two rival groups of landowners had a dispute over the executives of an Incorporated Land Group (ILG). In mediation, they agreed to hold a meeting and elect the executives. Thereafter, a mediation agreement was signed to pave the way for the meeting to be held. A meeting of landowners was held at a hotel in Goroka and despite being notified, the two individuals did not attend.
52. The landowners who attended elected the executives of the ILG and sent their names to the Registrar of ILGs in Port Moresby for registration and issuance of a Certificate of ILG. The two individuals appeared in Port Moresby and objected to the issuance of the Certificate. In fact the Registrar entertained them and cancelled the Certificate.
53. The Court held that the Registrar’s decision to cancel the Certificate was wanting and unreasonable because these two individuals absconded the meeting and then, turned around and objected to the issuance of the Certificate in favour of the new executives.
54. It is the same story here. The plaintiffs and Mr Hehona in this case should not be allowed to procrastinate at the expense of the landowners and importantly, beneficiaries of the Trust Fund. Their complaint about how the AGM was held is unreasonable and unacceptable.
55. To say the least, there were five attempts prior to the AGM under consideration that failed and it must surely come to an end at some point. Make no mistake about the conduct of the plaintiffs because Kariko J expressed the same concern when he said at paras. 29 to 30 of the judgment:
“20. In my opinion, an further delay in the holding of an AGM is prejudicial to the beneficiaries of the Trust Fund and other related stakeholders. They deserve a full complement of trustees properly appointed pursuant to the Trust Deed or as close a possible to the relevant provisions of the Deed in the circumstances.
56. Sabotage, obstructive, defiance, suppression and stubbornness are not words that are used lightly in everyday language but must be used here to describe the conduct of the plaintiffs and Mr Hehona. They and Mr Hehona have not come to Court with clean hands. They accused the first defendant of inequity but they are guilty of it, individually and collectively.
57. Their inequity disentitles them to the relief they seek.
Legality of First Defendant’s Entry into PNG
58. A further ground the plaintiffs relied on to claim that the AGM was illegally conducted was that the first defendant illegally entered the country from Australia and conducted the AGM. They reasoned that the plaintiff resigned from Barrick in June 2017 and his employment visa was cancelled on 6th June 2017 by the Department of Labour and Industrial Relations.
59. The short answer to this ground is this, it is misconceived and can be dismissed purely for the reason that the first defendant is not on trial for illegal entry into PNG. Based on the orders sought in the originating summons and as replicated at the opening paragraph of the judgment, the issue is whether the calling and conduct of the AGM was in accordance with the rules of the Trust Deed.
60. If this ground is pursued to show that the first defendant has not come to Court with clean hands or that he is guilty of inequity, which the plaintiffs do not assert, it can be also dismissed based on the reasons given by the first defendant, that he was no longer employed by Barrick as its Commercial Manager which explains why his employment visa was cancelled on 6th June 2017 by the Department of Labour and Industrial Relations.
61. His explanation is exceptional. He entered PNG on a Business Visa that was issued to him in Canberra on 30th May 2017 which was valid for 1 year and to attend the AGM as the Barrick Trustee.
62. By that time, he was no longer an employee of Barrick, but on a retainer for the purpose of conducting the AGM for the Trust Fund and also so that he could attend meetings of the Mining and Petroleum Industries Investment Fund of which he was at that time, still a director.
63. There is no question that the first defendant’s entry and presence in PNG was to assist and facilitate what appeared to be a serious break-down in the relationship between the trustees and the beneficiaries of the Trust Fund. The outcome of his effort was the successful AGM and the election of the second defendants as internal nominee trustees.
Events have overtaken the Proceeding
64. Finally, the events have overtaken the proceeding because much has happened since the AGM was held on 25th August 2017. The Trust has been operating for over three years under the control of the landowners trustees elected at the AGM on 25th August 2017.
65. The Porgera SML landowners had to wait between 2005 and August 2017 to have an AGM, and on 25th August 2017, the landowners finally got to have their say as to the operation of the Trust Funds and to elect their own representatives. These trustees operate out of Porgera and arguably are accessible and work together with the landowners on the ground.
66. In the circumstances and with the passage of time this proceeding itself has been rendered otiose and it will be against the interest of the SML Landowners to roll back the clock and reinstate the former interim trustees. Further, the plaintiffs held office as “interim trustees” pending the election of the permanent trustees. Thus, it does not give them a right to full tenure of office.
67. That does not mean that the plaintiffs are left without a remedy. They are entitled to nominate for election as landowner trustees and have their nomination considered by the landowners at the next AGM in three years time under clause10.3 of the Trust Deed.
Order
68. The orders of the Court are:
2. The proceeding is dismissed.
________________________________________________________________
Haiara Legal Practice: Lawyers for Plaintiffs
Ashurst Lawyers: Lawyers for First Defendant
Nandape Lawyers: Lawyers for Second Defendants
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URL: http://www.paclii.org/pg/cases/PGNC/2022/47.html