N10820

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 54 OF 2023 (IECMS) (COMM)

PAUL YAWE for & on behalf of himself & as Chairman of Aporo’Urri
Resource Owners Association inc. (AUROA) representing the interests
of its affiliated Clans with Moran (Fasu) PDL 2 which lists are appended
to this Summons.
-Plaintiffs-

AND:
SAKAI KEI – Interim Chairman of Kutubu Gas Holdings Limited
-First Defendant-

AND:
ASI BUSUBU – Interim Chairman of Kutubu Gas Holdings Limited
-Second Defendant-

AND:
PETER HENO – Interim Executive Director of Kutubu Gas Holdings Limited
- Third Defendant-

AND
KUTUBU GAS HOLDINGS LIMITED
-Fouth Defendant-

AND:
KUMUL PETEROLEUM HOLDINGS LIMITED (KPHL)
-Fifth Defendant-

Waigani: Wood J
2024: 8th May 
2024: 24th May

REPRESENTATIVE PROCEEDINGS – proceeding seeking various declarations, orders and injunctive relief, including in relation to the distribution of royalty payments from a Petroleum Development Licence, which is the subject of the PNG LNG Project – the principal plaintiff claimed he represented various clans and incorporated land groups – not all intended plaintiffs were identified, there were no proper authorities to authorise the commencement of the proceeding and no authority from the named plaintiffs authorising the principal plaintiff to commence the proceeding – the proceeding was dismissed due to the failure to comply with the requirements of a representative proceeding.

Cases Cited:

Simon Mali v The State (2002) SC690 and Eliakim Laki and 167 others v Maurice Alaluku & others (2002) N2001
Tigam Malewo & others v Keith Faulkner, Managing Director, Ok Tedi Mining Limited & others (2009) SC960

Legislation Cited

Oil and Gas Act 1998

Counsel

Mr J. Kolo, for Plaintiffs
Mr A. Mana, for the First, Second, Third and Fourth Defendants
No appearance on behalf of the Fifth Defendant

24th May 2024

1.	WOOD J: This Judgment relates to the hearing that took place on 8 May 2024, which related to whether the interim injunction that had previously being ordered by the Court should continue.  As part of the determination of that issue, orders had been made on 8 April 2024 for the parties to file submissions on that issue, including to address the Court on whether:

a)	the plaintiffs had standing in the proceeding;
b)	what was the status of the execution of the trust deed; and
c)	whether the relevant defendants complied with all the requirements under section 176 of the Oil and Gas Act 1998, and/or whether section 176 of the Oil and Gas Act 1998 applies.

Background

2.	The background to this proceeding is that the plaintiffs filed their Originating Summons on 13 October 2023 (the Originating Summons).  The plaintiffs subsequently filed an Amended Originating Summons on 27 February 2024 (the Amended Originating Summons).  

The Amended Originating Summons states as follows:

AMENDED ORIGINATING SUMMONS

1.	A DECLARATION that pursuant to Clause 6.3.2 (b) of the Licensed Based Sharing Agreement (hereinafter the “LBSA”) dated 23rd May, 2009, Petroleum Development License 2 (Kutubu) landowners as a beneficiary group are entitled to 12.0% in the Korton Equity Shareholding.

2.	A DECLARATION THAT pursuant to Clause 5.1 (b) (vii) of the Kutubu Petroleum Development License 2 Benefit Sharing Agreement (hereinafter “Kutubu PDL LBBSA”) dated 01 December 2009, the Project Area Landowners of PDL 2 (Kutubu) shall exercise other option to acquire Kroton Equity in the following proportion out of the 12% shares given under the UBSA as tabulated hereunder: -

	PROJECT AREAS within KUTUBU PDL 2	PERCENTAGE (%)
(PDL 2(Kutubu) 
12% = 100%	
A	FASU	70%	
B	South East Mananda (PDL 2)	15.0%	
C	Moran (PDL 2)	2.5%	
D	Foe (Upper and Lower)	10.0%	
E	Mubi Valley	1.5%	
F	Kasua (including Sokai)	1.0%	

3.	A DECLARATION that South East Mananda and Moran PDL 2 are constituent part of the PDL 2 (Kutubu) and together hold the second largest shares of 17.5% in the Korton Equity allocation for PDL 2 (Kutubu) as Project Area Landowners.

4.	A DECLARATION that the recent Roadshow arranged by the First, Second and Third Defendants regarding the establishment of Kutubu Gas Holding Limited (KGHL) to manage the 12.0% Kronton Equity for PDL 2 (Kutubu) held at Aiyo village (19.09.23) and finishing at Moran Development Corporation (KDC) Camps at Moro from the 19 to 21 September, 2023 in the Southern Highland Province is FAILED and INVALID for the following reasons:-

a)	The First, Second and Third Defendants in conjunction with their Working Committee refused and or failed to attend hold the Roadshow schedule to be held at Sisibis Village on Thursday 21st September ,2023 which was specifically co-host by South East Manada and Moran PDL 2 Project Areas Landowners and their respective leaders.

b)	The 35 beneficiary clans from Huli South East Manada (hereinafter “Huli Sem”) as well as 47 beneficiary clans from Moran (Fasu) PDL 2 as Project Area Landowners and their respective leaders were denied their rights to received vital information regarding the proposed establishment of KGHL including how their commercial interests are factored, amongst others contrary to Section 51[Right to Freedom of Information] of the Constitution; and 

c)	As a result, the 35 beneficiary clans from Huli SEM as well as 47 beneficiary clans from Moran (Fasu) PDL 2 as Project Area Landowners and their respective leaders were denied their rights to express their views, opinions and aspirations on the proposed incorporation of KGHL and their commercial interest, amongst other contrary to Section 46 [Freedom of Expression] of the Constitution; and 

d)	Unequal Representation in the Iterim Board of Directors and Working Committee of KGHL contrary to the distributions of shares under the Kroton Equity as per Clause 5.1 (b) (vii) of the Kutubu PDL 2 LBBSA dated 01 December, 2009 and Section 47 [Freedom of Assembly and Association] of the Constitution; and

e)	Indecision by Interim Directors and Working Committee   of KGHL Regarding the signed Petition dated 22nd of September 2023 which was submitted by the Huli SEM and Moran (Fasu) PDL 2 Beneficiary Clans through their leaders; and 

f)	Permitting the First Defendant (Mr. Sakai Kei) being a single Interim Director to collect and or received all Consent Forms and Signature Samples secretly and illegally signed by purported clan leaders’ or representatives from South East Mananda and Moran PDL 2 at MDC Camp at Moro on Friday 22 September, 2023

5.	A DECLARATION  that all Consent Forms and Signature Samples secretly and illegally signed by purported clan leaders or representatives from South East Mandanda PDL 2 and Moran PDL 2 at MDC Camp at Moro on Friday 22nd  September ,2023 and collected by the First Defendant are illegal, invalid and void ab inito.

6.	A DECLARATION that the recent Roadshow held by the First , Second and Third Defendants including their Working Committee regarding the incorporation of KGHL from the 19th – 22nd of September, 2023 are illegal, invalid and void ab inito.

7.	A DECLARATION that the recent payment of accrued dividends in the sum of K35,318,370.00 dated 21.02.2024 for Kutubu PDL2 in the PNG LNG Project by the Fifth Defendant to the Fourth Defendant is illegal void ab inito in the absence of a corporate trustee and trust deed governing same contrary to Section 176 of the Oil and Gas Act, 1998, amongst others. 

8.	AN INJUNCTION restrain the First, Second and Third Defendants from lodging and registering the Consent Forms and Signature Samples collected from the recent Roadshow for KGHL held from 19- 22nd September, 2023 in Kutubu, SHP with the Fourth Defendant and other Stakeholders in the PNG LNG Project forthwith.

9.	AN INJUNCTION against the Fourth Defendant (KPHL) and/ or any affected Stakeholders in the PNG LNG Project from accepting the lodgement, registration and endorsement of the Consent Forms, Sample Signatures and all other documents related thereto regarding the recent Roadshow for KGHL held from 19th – 22nd September, 2023 in Kutubu, SHP forthwith.

10.	AN INJUNCTION against the Fifth Defendant (KPHL) and /or any affected Stakeholders in PNG LNG Project from executing any instruments and or approving any submission lodged by the First, Second and Third Defendants on behalf of the Fourth Defendants (KGHL) for the transfer of 12% Kronton Equity Share for PDL determination of this proceedings or a further order of the Court.

11.	AN INJUNCTION against the Fourth Defendant and Fifth Defendant respectively and any commercial banks holding the accounts of the Fourth Defendant Company from dealing with the accrued dividend in the sum of K35, 318, 370.00 for Kutubu PDL 2 in the PNG LNG Project that was recently paid by the Fifth Defendant to the Fourth Defendant dated 21.02.2024 in any manner or form whatsoever pending the determination of this proceedings and or a further order of the Court.

12.	AN ORDER pursuant to Section 155(4) of the Constitution that the Defendants immediately reconvene a fresh Roadshow for KGHL in affected project areas within PDL 2 (Kutubu) in The Southern Highlands Province provided that the venue or Moran PDL 2 and South East Mananda Project Area Landowners respectively should be held in one location at Sisibia Village, Kutubu LLG, SHP.

13.	AN ORDER pursuant to Section 155 (4) of the Constitution that the Fourth Defendant procure and facilitate the engagement of independent persons or organizations to carry put the new Roadshow for KGHL with the presence of independent observes such as officials from Department of Petroleum and Energy (DPE), MRDC and within KPHL itself.

14.	AN ORDER pursuant to Section 176 of the Oil and Gas Act, 1998 and Section 155(4) of the Constitution that the accrued dividend payment in the sum of K35,318,370.00 dated 21.02.2024 for Kutubu PDL 2 in the PNG LNG Project and any future equity benefits payable to the project area landowners shall be held in trust by the Fifth Defendant pending the incorporation of a corporate trustee to be approved and endorsed by the majority of the project areas landowners following a revised Roadshow funded by the Fifth Defendant.
  
15.	The Defendants shall pay the costs of this proceedings on full indemnity basis.

16.	Any other or further orders this Honourable Court deems fit. 

The nature of the plaintiffs’ claim and the relief being sought in the proceeding

3.	The Originating Summons seeks a range of orders, declarations and injunctive relief.  In this regard, it is important to note that the principal plaintiff, Paul Yawe (Mr Yawe) is named as having commenced the proceeding for and on behalf of himself and as Chairman of the Aporo’ Urri Resource Owners Association Inc., representing the interests of its affiliated Clans within Moran (Fasu) PDL 2, which lists are appended to the Originating Summons.  In this regard, attached to the Originating Summons is a document entitled ‘Letter of Authorization’ which states as follows:

To Whom It May Concern:

On behalf of ourselves and our respective Clans which are constituent members of the Aporo’Urri Resource Owners Association Inc. (AUROA) whose names are listed in the Table attached, we hereby authorize MR. PAUL YAWE, Chairman – AUROA OF MORAN PDL 2 to act on our behalf in our personal capacities as well as our Clans in all manner including, but not limited to, engaging a law firm, raising funds and signing of all documents such as affidavits/ instruments relating to the following very urgent issues –

1.	Incorporation of Kutubu Gas Holdings Limited (KGHL);
2.	Lack of awareness and nil participation in the recent Roadshow carried by the Interim Board of Directors and Management of KGHL; and
3.	Our commercial/ participatory interests in KGHL.

______________________________
MR. PAUL YAWE (Chairman)
AUROA
(Authorised Person)

DATED the 01st day of October, 2023

4.	For the purpose of this Judgment, I will refer to the above document as the Letter of Authorization.

5.	The second attachment to the Originating Summons is a document entitled ‘Moran PDL 2 (APORO’URRI RESOURCE ONWERS ASSOCIATION INC. (AUROA)’, which lists nine names and signatures (the second Attachment).

6.	The third attachment to the Originating Summons is a document that is also entitled Moran PDL 2 (APORO’URRI RESOURCE ONWERS ASSOCIATION INC. (AUROA)’ (the third Attachment).  It lists the name of 44 clans and is purportedly signed by 31 people, however it is unclear who those people are and what they purport to authorise. 

7.	Of note, the Amended Originating Summons does not attach the names of any of the other purported plaintiffs, nor does it contain the details of any authorisation for the commencement or maintenance of the proceeding or to authorise the filing of the Amended Originating Summons.

8.	The plaintiffs state in their the document filed on 14 March 2024 entitled ‘Plaintiff’s Supplementary Submissions on Interim Injunctions’ (the supplementary Submissions) that they seek to challenge, what they say is the ‘purported Roadshow’ that was organised by the first, second and third defendants to garner support from the project area landowners of Kutubu PDL 2 to support and endorse the incorporation of Kumul Petroleum Holdings Limited (KPHL), which is the fifth defendant, to hold their 12% share in the PNG LNG Project.    

9.	In his Affidavit in Support filed on 13 October 2023 (Affidavit in Support), Mr Yawe says that he is from Sisibia 3 Village, Kake Kutubu, Southern Highlands Province.  He states he is also one of the principal landowners and is the Chief of the Konagebo Clan and the Mananda Fasu Clan, which has 47% landownership in South East Mananda Petroleum Development Licence No. 2 (PDL 2) and that it has a 99.645% interest in the Moran PDL2, within the PDL2 Licence Area.

10.	Mr Yawe also says he is the Chairman of Aporo’Urri Resource Owners Association Inc (AUROA), which he says looks after the affairs of 46 incorporated land groups, and which he also says are landowning groups.   In the supplementary Submissions, Mr Yawe says that the 46 ILGs are from both Moran PDL 2 and South East Mananda (SEM) and together they own eight well heads in Moran PDL 2 and the SEM Project Area.  

11.	Mr Yawe says he is a signatory to the Umbrella Benefits Sharing Agreement that was signed in Kokopo on 23 May 2009 (the UBSA) and Kutubu Petroleum Development Licence 2 LNG Project Benefits Sharing Agreement that was signed on 1 December 2009 the (LBBSA).    In the Affidavit in Support, Mr Yawe says that under clause 6.3.2(b) of the UBSA, the Petroleum Development Licence 2 (Kutubu) landowners were recognised as a beneficiary group with the allocation of 12% in Kroton Equity shareholding of the PNG LNG Project.   Of note, the above-mentioned 12% equity interest is managed by Kutubu Gas Holdings Ltd, which is a trustee company.
 
12.	In the Affidavit in Support, Mr Yawe states that under clause 5.1(b)(vii) of the LBBSA, the 12% Kroton Equity component was further disbursed as follows:

Fasu - 70%
South East Mananda - 15%
Foe - 10%
Moran PDL2 – 2.5%
Mubi Valley – 1.5%
Kasua (including Sokai) – 1%. 

Representative proceeding issues

13.	 In summary, Mr Yawe says he is the Chairman of the Aporo’ Urri Resource Owners Association Inc., that represents the interests of its affiliated Clans within Moran (Fasu) PDL 2.  He also says he is one of the principal landowners and is the Chief of the Konagebo Clan and the Mananda Fasu Clan and he is the Chairman of AUROA, which he says looks after the affairs of 46 incorporated land groups.   As detailed in the Amended Originating Summons, which is extracted above, this proceeding seeks various orders, declarations and injunctive relief regarding the equity interest and other rights of landowners groups within the area of land covered by Petroleum Development Licence no. 2 in the PNG LNG Project.  

14.	Of note, the plaintiffs’ court documents and the oral submissions of Mr Kolo at the hearing on 8 May 2024, state that the 46 incorporated land groups (ILGs) who Mr Yawe purports to represent, are currently unregistered.

15.	There are clearly hundreds, if not thousands of people who will be impacted by the relief being sought in this proceeding, including that it is important that any equity payment and other benefits in which the plaintiffs claim they have an interest, are properly managed and disbursed to the correct landowners for their benefit.  The potentially large amount of equity payments which are in issue in this proceeding can be seen in paragraph 7 of the Amended Originating Summons, where for example, a declaration is sought that the payment made on 21 February 2024 of accrued dividends in the amount of K35,318,370 is illegal and void.

16.	 Based on the above matters, it is clear that the proceeding is a representative proceeding.  The Supreme Court decision of Tigam Malewo & others v Keith Faulkner, Managing Director, Ok Tedi Mining Limited & others (2009) SC960, dealt with an appeal in which the National Court decision had been dismissed due to a number of reasons, including that the plaintiffs were not properly identified and failed to disclose their authority to represent other people (said to be about 13,000 individuals).   

17.	In the Tigam Malewo decision (supra), at pages 15 and 16, Justices Batari, Mogish and Cannings cited with approval the requirements of a representative proceeding as stated in Simon Mali v The State (2002) SC690 and Eliakim Laki and 167 others v Maurice Alaluku & others (2002) N2001, as follows:

‘Her Honour took the view, based on those decisions, that the following procedural requirements apply to representative actions:

- all intended plaintiffs must be named in the originating process;

- each and every intended plaintiff must give specific instructions (evidenced in writing) to their lawyers to act for them;

- any person in whose name proceedings are commenced and who claims to represent other intended plaintiffs must produce an authority to the court to show that he was authorised by them to file proceedings as a class representative.’

18.	 Based on the reasoning in Tigam Malewo (supra), it is apparent that the three schedules do not list all intended plaintiffs, nor do they contain any authority to the plaintiffs to commence the proceeding.  I also consider that there is no direct link between the three schedules and the Originating Summons, other than that they were stapled to the Originating Summons.  In this regard, the three schedules are of a different font and print type to the Originating Summons.    The Letter of Authorization is signed by Mr Yawe (and no one else) and is dated 1 October 2023, whereas the Originating Summons is dated 10 October 2023.  In addition, while the second Attachment and the third Attachment list the names of certain people, it is unclear who those people are, it is unclear under what authority they purport to sign those schedules and it is unclear what they purport to authorise.  Furthermore, there is no authority filed in the proceeding that is signed by the plaintiffs which authorises the plaintiffs’ lawyers to commence the proceeding.

19.	 Moreover, there is no schedule attached to the Amended Originating Summons, which complies with the above-mentioned requirements of a representative proceeding.

20.	 Of note, when queried on the issue of whether the proceeding satisfied the requirements of a representative proceeding, counsel for the plaintiffs, Mr Kolo, submitted that annexure B to his affidavit filed on 25 April 2024 constituted, in part, an authority by certain landowners for the commencement of the proceeding.  I do not accept Mr Kolo’s submission on this point on annexure B for a number of reasons, including that annexure B does not contain any authority to Mr Yawe to commence the proceeding.  I note that annexure B lists a number of declarations, including that it states there was no “Roadshow” at Sisibia Village.  Annexure B also states at paragraph 5 that certain landowners support Mr Yawe and Mr Kopol Pepe to ‘...  strongly pursue and seek justice on behalf of the affected ILG/ Clans in both Moran PDL 2 & SEM in the Court proceeding: OS No. 54 of 2023 – Paul Yawe v Sakai Kei & Ors & OS 55 of 2023 – Kopol Pepe v Sakai Kei & Ors.’ 

21.	 In summary, I dismiss the proceeding because it fails to comply with the requirements of a representative proceeding because the schedules to Originating Summons did not constitute any authority to Mr Yawe to commence the proceeding.  Furthermore, I consider there are no documents on the court file or attached to the Originating Summons or the Amended Originating Summons which demonstrate that all intended plaintiffs are named in the proceeding.  There is no evidence that each and every intended plaintiff has given specific instructions (evidenced in writing) to the plaintiffs’ lawyers to act for them.  Mr Yawe has not attached to the Originating Summons or the Amended Originating Summons an authority to show that he was authorised by the plaintiffs to file the proceedings as a class representative.

22.	 In addition, the submission of Mr Yawe’s lawyer was that the 46 ILGs who Mr Yawe purports to represent, are currently unregistered.  In this regard, if the 46 ILGs are unregistered, then the ILGs could not resolve to be represented by Mr Yawe and/or AUROA.

     Orders:

23.	The relief granted by the Court is as follows:

a)	The proceeding is dismissed.

b)	The injunction granted by the Court in this proceeding on 28 February 2024 and which was extended by order of the Court on subsequent dates is set aside and discharged.

c)	The plaintiffs shall pay the first, second, third and fourth defendants’ costs of and incidental to the proceeding, which shall be taxed, if not agreed.

d)	The terms of these Orders are abridged to the date of the settlement by the Court, which shall take place forthwith.

Kolo & Associate: Lawyers for the Plaintiff
Allan Mana: Lawyers for the First, Second, Third and Fourth Defendants
No appearance by the fifth defendant