N11234
PAPUA NEW GUINEA
[NATIONAL COURT OF JUSTICE]

OS NO 203 OF 2024

BETWEEN
DICKSON ANGO customary landowner, beneficiary and Chairman of Tagaya Clan, Mbuta Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries who names are listed in the Consent to Act Form attached herewith and marked as “Schedule 1”
First Plaintiff

AND
EGARI AMENAYA customary landowner, beneficiary and Chairman of Telia Clan of Aroma Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries whose names are listed in the Consent to Act Form attached herewith and marked as “Schedule 2”
Second Plaintiff

AND
STEWARD PAUL PUNI customary landowner, beneficiary and Chairman of Tabiri Clan of Aroma Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries whose names are listed in the Consent to Act Form attached herewith and marked as “Schedule 3”
Third Plaintiff

AND
TIMOTHY PEABE customary landowner, beneficiary and Deputy Chairman of Nogoba Clan of Aroma Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries whose names are listed in the Consent to Act Form attached herewith and marked as “Schedule 4”
Fourth Plaintiff

AND
WILLIAM MULI PEABE customary landowner, beneficiary and Chairman of Temeya Clan of Laguni Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries whose names are listed in the Consent to Act Form attached herewith and marked as “Schedule 5”
Fifth Plaintiff

AND
HARIGI YAVE customary landowner, beneficiary and Chairman of Mbutu Kalembo Clan of Mbutu Tribe, Habono Region, Hides PDL1, Hela Province, who represent other beneficiaries whose names are listed in the Consent to Act Form attached herewith and marked as “Schedule 6”
Sixth Plaintiff

AND
MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED
First Defendant

AND
DAVID MANAU, SECRETARY FOR DEPARTMENT OF PETROLEUM & ENERGY
Second Defendant

AND
ELECTORAL COMMISSION
Third Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant

AND
THOMAS DARA OLA in his capacity as Chairman of Kopiya Clan & elected Gas Resources Director of Habono Region PDL 1
Fifth Defendant

AND
THOMSON EDAI, in his capacity as Chairman of Topani Clan & & elected Gas Resources Director of Habono Region PDL 1
Sixth Defendant

AND
ANDREW PULUPE, in his capacity as Chairman of Wanga Clan of Habono Region PDl 1
Seventh Defendant

WAIGANI: MAKAIL J
3, 4 APRIL 2025

PRACTICE & PROCEDURE – Application to dismiss proceedings – Failure to disclose reasonable cause of action – Dispute over representative of project area landowners as director to trustee company – Election of representative of project area landowners – Oil and Gas Act, 1998 – Section 176(3)(b) – National Court Rules – Order 12, rule 40(1)(a) 

PRACTICE & PROCEDURE – Application to dismiss proceedings – Frivolous and vexatious – Proceedings commenced by originating summons – Declaratory orders sought – Breach of process to facilitate election – Orders sought to question legality of election of representative of project area landowners on trustee board – Oil and Gas Act, 1998 – Section 176(3)(b – National Court Rules – Order 12, rule 40(1)(b) 

PRACTICE & PROCEDURE – Application to dismiss proceedings – Abuse of process – Ministerial determination – Approval of clans of project area landowners to receive equity and royalty benefits – Conflicting number of clans – Whether dispute as to correct number of clans open to judicial review – Oil and Gas Act, 1998 – Section 169(10) – National Court Rules – Order 12, rule 40(1)(c) – Order 16 
 
PRACTICE & PROCEDURE – Application to set aside interim injunction – Serious question to be trial – Balance of convenience – Damages as an adequate remedy – Interim injunction set aside

Cases cited
Luke Pelego & Ors v Minister for Petroleum & Energy & The State (2021) N8745
PNG Forest Products Ltd and Inchape Berhard v The State and Jack Genia [1992] PNGLR 85 
Mount Hagen Urban Local Government v Sek No 15 Limited (2009) SC1007

Counsel
Mr N Yalo for plaintiffs
Mr R Kebaya for first defendant 
No appearance, for second & third defendants
Mr S Ako for fourth defendant
Mr J Napu for fifth defendant

INTERIM RULING

1.	MAKAIL J: This is a ruling on two notices of motions. 

Introduction

2. 	These are:	

(a)	the first defendant’s notice of motion filed on 11th February 2025 which seeks dismissal of the proceedings for failing to disclose a reasonable cause of action, being frivolous and vexatious and abuse of process under Order 12, rule 40 of the National Court Rules (“NCR”) and/or set aside of the interim injunction of 19th November 2024.

(b)	the fifth defendant’s notice of motion filed on 5th March 2025 seeking dismissal of the proceedings for failing to disclose a reasonable cause of action, being frivolous and vexatious and abuse of process under Order 12, rule 40 of the NCR.

2.	The counsel for the parties are acknowledged for their respective comprehensive and extensive oral submissions made in addition to the written submissions and reference to relevant affidavits for and against the motions and the following will be noted by way of introduction: 

•	according to Section 176(1) of the Oil and Gas Act, 1998 (“the Act”) equity and royalty benefits granted by the State in accordance with Section 167 and Section 168 of the Act to project area landowners in accordance with Section 175 of the Act shall be received and held upon a trust for those project area landowners by a corporate trustee which is wholly owned by MDRC.

•	according to Section 176(3)(b) of the Act, the composition of the board of directors of the trustee shall be: 

o	in the majority by representatives of the State (including the managing director of MRDC), and

o	in the minority by representatives of the grantees of the benefits.

•	on 19th May 2019 the Minister for Petroleum and Energy (“the Minister”) made a Determination (“Ministerial Determination”) which was published in the National Gazette approving 17 clans from the Habono region to receive equity and royalty benefits.

•	These clans, as listed from 1 to 17, are:

o	Tunali
o	Tameya
o	Wanga
o	Kopiya
o	Tobani
o	Nole
o	Ugumi
o	Mbuta Kiru
o	Mbuta Kalembo
o	Pimbi
o	Takaya
o	Tombe
o	Talipuni
o	Kendali
o	Ara Tungu
o	Aroma
o	Tabu Tagiruna

3.	The common relevant facts extracted from the affidavits are: 

•	to give effect to the appointment of the minority directors into the Trustee board, MRDC facilitated the director’s election through a non-parliamentary process which was run by the PNG Electoral Commission for the Habono region of Hides PDL1 project area until the two groups of landowners disputed it.

•	a dispute arose between the two groups of landowners because one group led by the led plaintiff Mr Dickson Ango claimed that 6 of clan Chairmans attended and elected the fifth defendant Mr Thomas Dara Ola while the other group led by Mr Ola claimed that majority of the clan Chairmans attended and elected him.

•	according to the first and fifth defendants, 6 out of 17 clan Chairmans from Tameya, Kopiya, Nole, Mbuta Kalembo, Tombe, Talipuni, Kendali and Tabu Tagiruma attended out of 17 clans and elected Mr Ola at the election run by the PNG Electoral Commission Mr Desmond Timiyaso on Saturday 29th June 2024.

•	subsequently, 2 clans from Tobani and Wangu who had a dispute over their respective Chairmanship resolved it by litigation in the National Court and the Chairmans recognised by the National Court pledged their support for Mr Ola.  These 2 clans brought the total number in support of Mr Ola as their representative director, to 8 clans.

•	on the other hand, the plaintiffs claimed that:

o	there are 19 clans listed in the Ministerial Determination because Aroma listed as no 16 clan is not a clan but a tribe.  As a tribe, Aroma has 3 clans, and they are Nelia, Tambiri and Nokope.

o	add these 3 clans to 16 clans gives a total of 19 clans.

o	the majority of the number of clans to elect the representative director is either 9 or 10.

o	in this case, 6 clans elected Mr Ola, and this number of clans is less than the majority clan of either 9 or 10 clans.

•	the first and fifth defendants counter that the Court should read the Ministerial Determination as it is and not read into it and will find that there are only 17 clans and further, that Aroma is not a tribe but one of the clans that make up the 17 clans.

Failure to disclose a reasonable cause of action

4.	From the affidavits and submissions of parties, it is abundantly clear there is a serious dispute in relation to the number of clans to attend and elect the representative director at the election run by the PNG Electoral Commission.  The first question for parties to resolve is the total number of clans listed in the Ministerial Determination.  Is it 17 as argued by the first and fifth defendants or 19 as claimed by the plaintiffs?  This will require the Court to consider the view proffered by the first and fifth defendants that the Court should read the Ministerial Determination as it is and not read into it and will find that there are only 17 clans and further, that Aroma is not a tribe but one of the clans that make up the 17 clans. 

5.	Equally, it will require the Court to consider the plaintiffs’ claim that Aroma is not a clan but a tribe and from that, Aroma has 3 clans which brings the total number of clans to 19.  To determine this question, in addition to the letter from the second defendant’s Senior Coordinator of the Hides PDL1 & GTE Project to the first defendants’ lawyers dated 28th July 2024 verifying that there are 19 clans and that Aroma is a tribe, it will not be necessary to consider the Ministerial Determination on its face value but also the primary documents and information including the submissions made by the Department of Petroleum and Energy (“DPE”) to the Minister when he made the Determination to determine the correct total number of clans.

6.	The second question for parties to resolve is the majority number of clans to attend and elect the representative director at the election run by the PNG Electoral Commission.  Is it 6 and then 8 clans as argued by the first and fifth defendants or 9 or 10 clans as claimed by the plaintiffs. Similarly, it is necessary to consider this question in detail because it is obvious that the parties are in complete disagreement in relation to the question of the majority number of clans to attend and elect the representative director at the election run by the PNG Electoral Commission.  

7.	The disagreement is compounded by the addition of 2 clan Chairmans throwing their support behind Mr Ola after their respective Chairmanship disputes was by decided by litigation in the National Court.   This gives rise to a further question whether their support for Mr Ola outside the electoral process run by the PNG Electoral Commission is legal and their support counts towards Mr Ola.

8.	Finally, while the first defendant strongly argues that the dispute over clan Chairmanship is one of customary law and falls within the jurisdiction of the Local Land Court for determination, it has not been established by reference to the specific provisions of a statute be it the Land Disputes Settlement Act or otherwise conferring jurisdiction to the Local Land Court to determine such dispute.  Moreover, there is no evidence presented by the first defendant that there is a customary land ownership dispute amongst the members of the 2 respective clans such that it is not open to the National Court to determine the customary land ownership dispute.

9.	This being the case, the questions raised in these proceedings demonstrate that the first and fifth defendants have failed to establish that these proceedings failed to disclose a reasonable cause of action.

Frivolous and Vexatious  
	
10.	Much have been said about the relief being sought in the originating summons and whether there is any utility in progressing these proceedings where 8 clans have thrown their support behind Mr Ola to be the representative director, and while it is correct that order sought at paragraph 5 of the originating summons does appear to lave no legal foundation, the order sought at paragraph 8 sufficiently outlines the plaintiffs’ grievance as being one of legality of the election of Mr Ola because not all clan Chairmans attended and cast their votes at the election conducted by the PNG Electoral Commission.  The conflicting number of clans as majority to force an election to be held compounds the conflict.  

11.	Moreover, contrary to the first and fifth defendants’ strong submissions that the majority of the clan Chairmans have elected and/or supported Mr Ola to be the representative director and that if the proceedings were to progress to trial, it is bound to fail, there is a serious dispute in relation to the number of clans in the Ministerial Determination and number of clan Chairmans who attend and elected Mr Ola at the election conducted by the PNG Electoral Commission. 

12.	It is further reinforced the plaintiffs’ evidence that persons who claimed to be clan Chairmans and voted for Mr Ola were hand picked by certain individuals working for the developer rather than being elected by members of their respective clans.  The account of tampering with the election process overshadows the first defendant’s strong submission that the plaintiffs lacked the authority to commence these proceedings because they are not clan Chairmans.  These are some of the factual matters in dispute which demonstrate that these proceedings are not a sham or frivolous and vexatious but bring to the fore the legality of Mr Ola’s election.

Lack of Notice under Section 5 	

13.	There is conflicting evidence in relation to the giving of notice under Section 5 of the Claims By and Against The State Act, 1996 (“CB&AS Act”).  Accepting the account by Christine Gimots who is the Case Management System (CMS) Acting Manageress in the Office of the Solicitor General that there is no record of entry of a notice of claim in the computer date base of that office prior to the commencement of these proceedings, there is no evidence to counter the plaintiffs’ account in the affidavit of service of Geroge Lau sworn on 9th August 2024 and filed on 14th August 2024 that the plaintiffs gave notice of claim by delivering it to the Office of the Attorney-General with copy to the Solicitor General on 29th July 2024.  The fourth defendant’s counter submission that the Attorney-General is not an authorised person to receive a notice of claim under Section 5(1)(a) of the CB&AS Act is inconsequential and begs the question whether the fourth defendant is aware of being served the notice and serious about resolving a serious conflict between project area landowners in relation to having a voice at the board of the Trustee company.

Abuse of Process

14.	The claim of abuse of process was grounded on the notion that the order sought at paragraph 1 of the originating summons seeks a declaration to affirm the Ministerial Determination is being pursued to avoid being caught by delay if it were judicial review proceedings under Order 16 of the NCR.  The plaintiffs’ chances of getting passed the threshold requirement of delay is further compounded by the time-limitation of 28 days in Section 169(10) of the Act and that to commence proceedings by originating summons to question the soundness of the Ministerial Determination is clear case of abuse of process and these proceedings should be dismissed.

15.	However, the evidence demonstrate that this is not a case of clans missing out of the Ministerial Determination questioning the lawfulness of the Ministerial Determination or clans approved in the Ministerial Determination disputing each other’s inclusion in the Ministerial Determination as in the case of Luke Pelego & Ors v Minister for Petroleum & Energy & The State (2021) N8745 where the appropriate mode of proceedings will be judicial review under Order 16 of the NCR and reinforced by Section 169(10) of the Act, but one of election of the representative director to the Trustee company under Section 176(3)(b) of the Act.  This is a distinct dispute and one which is open to challenge by way of originating summons under Order 4, rule 3 (Where plaintiff may choose) of the NCR.

16.	In addition, the gist of the complaint by the plaintiffs is in relation to the correctness of the total number of clans in the Ministerial Determination where there are two conflicting number of clans presented in these proceedings due to the way the Ministerial Determination has been drafted where there are 2 more names under Aroma in no. 16 on the list. 

Cross-Claim

17.	The first defendant eagerly supported by the fifth defendant asks the Court to affirm the results of the election where Mr Ola should have the Court endorsement for the parties to recognise him as the duly elected representative director to the board of the Trustee company.  However, the order proposed is substantive in nature and should form part of a cross-claim to these proceedings for an order in that nature to lie.  No cross-claim has been filed and served and such a request is declined. 

Interim Injunction 

18.	On 19th November 2024 the National Court granted an interim injunction restraining:

(a)	the defendants from recognising the election of Gas Resource Director of Hobono region, Hides PDL1, Hela Province, pending the determination of these proceedings; and

(b)	the first defendant from making any equity and royalty payments to landowners of Habono region, Hides PDL1 of Hela Province pending the determination of the proceedings.

19.	The interim injunction was made returnable for further hearing on 26th November 2024 at 9:30 or soon thereafter during the Supreme Court week.  Further, the Court directed the plaintiffs to settle the leadership and participation in the Trustee company and the interim injunction will be lifted and the decision arrived at by 8 participating clans will be confirmed.  Finally, the plaintiffs shall inform the rest of the clans of the decision arrived at by the 8 participating clans on 29th June 2024.

20.	On 27th November 2024 the National Court called up the matter for further hearing.  It is noted that there were some discussions round the order of the National Court of 27th November 2024 which, amongst others, directed parties to go back to obtain majority votes from clan Chairmans before the parties return to Court for further hearing and for parties to return to Court on 19th December 2024 with a resolution for the Court’s endorsement, but it did not bring an end to the conflict and has left the parties half way.  Mr Ola remains the favourite candidate amongst the clans when the parties returned for Court for further hearing, but the legality of his election will have to be decided by the Court as the parties did not take up the option given by the Court in November last year.

21.	While it has been established that these proceedings raise serious questions to be tried, there are two further two questions to determine and these are, the balance of convenience and damages being an adequate remedy.  As to the second consideration, it has not been established that the plaintiffs have and will suffer irreparable damage if the interim injunction is set aside. If the grant of the interim injunction was to stop and preserve equity and royalty benefits from being paid to project area landowners of Habono region, and not any other reason, then it is a misconception and misinformation by landowners in this case that no equity and royalty benefits should be disbursed to them until a representative director is elected by them to the board of the Trustee company.  

22.	This view and information are incorrect in law because by law in Section 167 and Section 168 of the Act, the primary document and source of information for disbursement of equity and royalty benefits to the project area landowners of Habono region is the Ministerial Determination.  Pursuant to the Ministerial Determination, clans have been approved to receive equity and royalty benefits and secondly but importantly, fixed a portion by percentage for each clan to receive.  The upshot is, where the Trustee company is disbursing the equity and royalty benefits to the clans, it is guided by the portion per percentage fixed in the Ministerial Determination. On the other hand, the participation of the representative director will be necessary where the board of the Trustee company is deciding investment of the equity interest under Section 176(3)(c) of the Act, but this is not the case.

23.	The longer the interim injunction remains, the longer the delay in the Trustee company giving effect to the Ministerial Determination and the longer the delay by the clans from receiving the equity and royalty benefits.  This is the loss by which not only the members of the clans have and will continue to suffer but also the plaintiffs, first defendant and fifth defendant in these proceedings. That said, it is reassuring to note that members of the clans including the plaintiffs, first defendant and fifth defendant in these proceedings have the backing of the Ministerial Determination to receive the equity and royalty benefits and as to the third consideration, if the plaintiffs succeed in the ultimate end of these proceedings, they can adequately be compensated by damages for any loss suffered.

24.	For the foregoing reasons, it is not in the interest of justice and the parties that the interim injunction restraining Mr Ola as the recognised representative director and access to the equity and royalty benefits by the clans should continue.  

Conclusion

25.	The discretion conferred on the Court under Order 12, rule 40(1)(a)-(c) of the NCR to dismiss proceedings will be exercised in cases where it is plain and obviously untenable that it cannot possibly succeed or would be bound to fail if it went to trial or that it is incontestably bad or that it merely seeks to harass the opposing party and put the party to unnecessary trouble and expense in defending the claim.  PNG Forest Products Ltd and Inchape Berhard v The State and Jack Genia [1992] PNGLR 85 and Mount Hagen Urban Local Government v Sek No 15 Limited (2009) SC1007.  

26.	For the reasons outlined above, the present case is not one where it is plain and obviously untenable that it cannot possibly succeed or would be bound to fail if it went to trial or that it is incontestably bad or that it merely seeks to harass the opposing party and put the party to unnecessary trouble and expense in defending the claim.  PNG Forest Products Ltd and Inchape Berhard (supra) and Mount Hagen Urban Local Government v Sek No 15 Limited (supra).

Order

27.	The orders are:

1.	The first defendant’s notice of motion filed on 11th February 2025 is upheld in part.

2.	The order sought to dismiss the within proceedings for failing to disclose a reasonable cause of action, being frivolous and vexatious and abuse of process is dismissed.

3.	The interim injunction of 19th November 2024 restraining the defendants from recognising the election of Gas Resource Director of Habono region Hides PDL1, Hela Province, pending the determination of these proceedings is set aside.

4.	The interim injunction of 19th November 2024 restraining the first defendant from making any equity and royalty benefits payments to project area landowners of Habono region under the Ministerial Determination dated 19th May 2019 is set aside.

5.	The fifth defendant’s notice of motion filed on 5th March 2025 is dismissed.

	6.	Costs of the motions shall be in the proceedings.

7.	Time for entry of these Orders is abridged to the date of settlement by the Registrar, which shall take place forthwith.
________________________________________________________________
Lawyers for plaintiffs: WKY’s Legal Services 		
Lawyers for first defendant: Kebaya Lawyers				
Lawyers for fourth defendant: Acting Solicitor General	
Lawyers for fifth defendant: Napu & Co Lawyers