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Sixth Estate Ltd v Phoenix Builders Ltd (1-63758) [2026] PGNC 33; N11679 (22 January 2026)

N11679

PAPUA NEW GUINEA

[NATIONAL COURT OF JUSTICE]


WS (COMM) NO. 24 OF 2023 (IECMS)


BETWEEN:
SIXTH ESTATE LIMITED
Plaintiff


AND
PHOENIX BUILDERS LIMITED (1-63758)
First Defendant


AND:
DAVID WEREH in his capacity as SECRETARY OF DEPARTMENT FOR WORKS AND IMPLEMENTATION
Second Defendant


AND:
BENJAMIN SAMSON in his capacity as the SECRETARY FOR THE DEPARTMENT OF LANDS & PHYSICAL PLANNING AND DELEGATE OF THE MINISTER
Third Defendant


AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fourth Defendant


WAIGANI: CAREY J
11, 12 NOVEMBER 2025; 22 JANUARY 2026

NOTICE OF MOTION — Whether motion to be granted or refused — Section 5 Claims by and Against the State Act 1996 – Section 138 and Schedule 4 of the Companies Act 1997 – Exercise of discretion


The Third and Fourth Defendants filed a Notice of Motion seeking to dismiss the entire proceedings on the basis that the proceeding was filed with no company resolution obtained when the Plaintiff company initiated the proceeding as required by Section 138 and Schedule 4 of the Companies Act 1997. They further sought dismissal of the matter on the basis that Section 5 of the Claims By and Against the State Act 1996 was not complied with by the Plaintiff.


Held:

  1. Non-compliance with Section 5 of the Claims By and Against the State Act 1996 does not automatically render proceedings incompetent at an interlocutory stage. Where there is evidence of notice and a pleaded case of continuing tort, compliance with Section 5 is a matter to be determined on evidence at trial rather than by summary dismissal.
  2. Where trespass is pleaded as continuing, the occurrence for the purposes of Section 5 of the Claims By and Against the State Act 1996 is not confined to a single historic event but recurs for so long as the unlawful occupation or use persists, such that the statutory notice period may run from the most recent occurrence of the trespass.
  3. Section 138 and Schedule 4 of the Companies Act 1997 regulate internal board procedures and do not, without more, impose a universal pre-filing requirement that a board resolution be exhibited to cover a company with standing to sue. The absence on the court record of a board resolution does not, of itself, render proceedings incurably incompetent, particularly where authority may be implied, ratified, or otherwise established on evidence.
  4. The Third and Fourth Defendants’ application to dismiss the proceeding for alleged non-compliance with Section 5 of the Claims By and Against the State Act 1996 is refused.
  5. The Third and Fourth Defendants’ application to dismiss the proceeding for want of a company resolution under Section 138 and Schedule 4 of the Companies Act 1997 is refused.
  6. The Second to Fourth Defendants are granted leave under Order 1 Rule 15 and Order 7 Rule 6 (2) of the National Court Rules to file and serve their Defence out of time.
  7. The Defence is to be filed and served within 21 days of this order.
  8. Within 28 days, the parties are to confer and file a joint case-management statement proposing: (i) any preliminary questions, (ii) a discovery plan related to registered plans and acquisition files relevant to Portions 2733 and 1631, and (iii) whether targeted expert surveying evidence can be jointly obtained.
  9. Costs be in the cause.
  10. Time for entry of these Orders be abridged to the time of settlement by the Registrar which shall take place forthwith.

Cases cited
Asiki v Zurenouc, Provincial Administrator [2005] SC797
Habolo Building and Maintenance Ltd v Hela Provincial Government [2016] SC1549
Ibi Enei v Rimbunan Hijau Ltd [2011] N4402
Kolta Development Limited and Margin Pty Ltd and Patrick K. Kolta v Independent State of Papua New Guinea [2013] N5954
Radio Taxis Ltd v Wano [2018] PGSC98; SC1768

Rimbunan Hijau Ltd v Ibi Enei [2017] SC1605


Counsel
Mr. T. Tape, for the plaintiff
Mr. I. Opahi, for the first defendant

Ms. S. Nisimi, for the second, third and fourth defendants


JUDGMENT

  1. CAREY J: This is the decision in relation to a Notice of Motion filed on 29th September 2025 by Benjamin Samson in his capacity as the Secretary for the Department of Lands & Physical Planning and Delegate of the Minister (the Third Defendant) and The Independent State of Papua New Guinea (the Fourth Defendant) (collectively the Defendants).
  2. The Defendants’ Notice of Motion sought to dismiss the entire proceedings against Sixth Estate Limited (the Plaintiff) on the basis the Court proceedings filed did not have a company resolution obtained by the Plaintiff when the Plaintiff initiated the proceeding as required by Section 138 of the Companies Act 1997 and the Plaintiff was in breach in Section 5 of the Claims By and Against the State 1996 (Section 5 CBASA).
  3. Alternatively, the Defendants sought to file its Defence out of time.

BACKGROUND


  1. The Plaintiff sues for trespass said to have arisen during construction of a public road (Gerehu–Morata/Magani Crescent) and seeks compensation and regularisation of acquisition for the road corridor.
  2. Phoenix Builders Limited (1-63758) (the First Defendant) is the contractor.
  3. David Were in his capacity as the Secretary of Department for Works and Implementation (the Second Defendant) to the Fourth Defendants are sued in respect of alleged public authority responsibility for the road and acquisition.
  4. The proceeding was referred to mediation in August 2024 and the order was extended in December 2024.
  5. The Plaintiff opposes dismissal.
  6. Further, the Plaintiff indicates a Section 5 CBASA notice was served on 19th June 2024 and trespass is pleaded as continuing, there is no strict pre-filing requirement to exhibit a board resolution and Section 9 CBASA is not the correct source for an extension of time, though the Court may extend time under the National Court Rules (the NCR).

ISSUES


  1. The issues for the Court are as follows:
    1. Whether or not the entire proceedings should be dismissed for want of compliance of the prerequisite Section 5 CBASA?
    2. Whether the Plaintiff has locus standi to bring the proceeding?
    1. Whether Second, Third and Fourth Defendants should be granted leave to file their Defence out of time?

DETERMINATION


  1. The Defendants contend the cause of action arose between 2017 and 2018 and that the Plaintiff failed to give Section 5 notice CBASA within six months, with no extension sought, rendering the claim incompetent.
  2. In Habolo Building and Maintenance Ltd v Hela Provincial Government [2016] SC1549 it indicates that Section 5 notice CBASA is a condition precedent.
  3. The Plaintiff avers that the Amended Writ and Statement of Claim joining the Second to Fourth Defendants were filed on 26th June 2024, Section 5 CBASA notice was given by letter dated 18th June 2024, served on the Office of the Solicitor-General on 19th June 2024 and later on the Attorney General on 26th June 2024, and continuous trespass is pleaded, so the “occurrence” for Section 5 CBASA purposes recurs until the unlawful occupation and use is remedied.
  4. The Third and Fourth Defendants indicate that in Asiki v Zurenouc, Provincial Administrator [2005] SC797, notice under Section 5 CBASA only applies to actions based on contract, tort or breaches of constitutional rights.
  5. In land matters, the tort of trespass is continuous where a defendant remains in unlawful occupation or use of the land, and each day of unlawful use constitutes a fresh occurrence of trespass. Where continuous trespass is pleaded in the Statement of Claim, the cause of action is treated as recurring for so long as the unlawful occupation persists. This principle was affirmed in Ibi Enei v Rimbunan Hijau Ltd [2011] N4402, where Gavara-Nanu J held that the Defendant’s continued use and occupation of the Plaintiff’s land without lawful authority constituted trespass and continuous trespass.
  6. That reasoning was upheld on appeal in Rimbunan Hijau Ltd v Ibi Enei [2017] SC1605, where the Supreme Court confirmed that unlawful entry onto land and remaining there without consent amounts to an ongoing illegality until the occupation ceases.
  7. Accordingly, where continuing trespass is pleaded, the occurrence for the purposes of Section 5 of the CBASA recurs, and time does not run solely from an historic first entry.
  8. The Plaintiff’s pleading of continuing trespass also mitigates against a technical strike-out on the premise that the six-month period could only run from a single historic event.
  9. The Plaintiff identifies the road as presently running through its land and pleads ongoing wrong.
  10. Importantly, while Section 5 CBASA is regularly described as a condition precedent, the Third and Fourth Defendants’ Notice of Motion relies on Section 5 CBASA itself and Order 12 Rule 40 as a jurisdictional hook to dismiss.
  11. The Plaintiff identifies and that the proper mechanism to test Section 5 CBASA non-compliance at this juncture is by appropriate application under the NCR in Order 12 Rule 40 for abuse only where the defect is plain and irremediable or, at trial after discovery of the State’s records concerning notice.
  12. I accept this argument as in Kolta Development Limited and Margin Pty Ltd and Patrick K. Kolta v Independent State of Papua New Guinea (2013) N5954 it states:

“9. In Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg & Ors (2006) N3050, speaking of the need to disclose a reasonable cause of action and the courts power to dismiss a claim for failure in that regard, I noted after reviewing the relevant cases on point that:

“1. Our judicial system should never permit a plaintiff or a defendant to be “driven” from the judgment seat” in a summary way, “without a Court having considered his right to be heard.” A party has a right to have his case heard, as guaranteed by the Constitution and the laws of the land. The rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the Court. That right cannot be lightly set aside.”

  1. On the Affidavit in Support by Sherol Nisimi sworn on 19th September 2025 and filed on 29th September 2025, I am not satisfied that the proceeding is so clearly incompetent that it should be summarily dismissed.
  2. The question of strict compliance with Section 5 CBASA should be determined on evidence at trial.
  3. The Third and Fourth Defendants submit that a company must exhibit a duly passed board resolution authorising litigation as a condition precedent, failing which the company lacks standing and the proceeding is an abuse. They refer to Radio Taxis Ltd v Wano [2018] PGSC98; SC1768 and invoke Section 138 and Schedule 4 of the Companies Act.
  4. The Plaintiff responds that Section 138 and Schedule 4 of the Companies Act are internal board procedures and that litigation authority may be exercised through directors or managers under well-known doctrines of actual or implied authority.
  5. The Plaintiff further argues that a strict exhibit in relation to the resolution is neither in the statute nor consistently applied.
  6. The Plaintiff also notes that objections to a company’s internal authority are ordinarily raised by persons within the company, not strangers, and that single director companies cannot sensibly be required to pass formal resolutions in every case before filing.
  7. At this stage of the proceedings, the question that has to be considered is whether absence on the file of a board resolution renders the claim incurably incompetent.
  8. I am not persuaded that it does because the Companies Act provisions tendered which is Section 138 and Schedule 4 regulate how boards conduct their own meetings.
  9. They do not, in terms, create a universal, pre-filing evidentiary exhibit requirement on pain of nullity.
  10. The Plaintiff’s submission accurately reflects that questions of authority especially vis-à-vis third parties or the company’s external acts are often treated through agency principles and board-level delegations and that challenges are frequently matters of proof and internal governance, not automatic jurisdictional bars.
  11. On the present record, there is no evidence from within the Plaintiff company disputing authority to sue.
  12. Even accepting the Third and Fourth Defendants’ legal proposition, the asserted defect would be curable by production of a resolution, ratification, or other proof of authority.
  13. As such, I am not persuaded that this warrants the drastic remedy of dismissal under Order 12 Rule 40(1)(c).
  14. The Third and Fourth Defendants have alternatively sought to file a Defence out of time.
  15. The Plaintiff correctly observes that Section 9 CBASA is not the jurisdictional source to extend time.
  16. The proper jurisdictional basis is found in the NCR in Order 1 Rule 15 or Order 7 Rule 6(2) and where appropriate, the Court’s inherent powers.
  17. The Third and Fourth Defendants should invoke the Court’s powers under the NCR.
  18. However, in the exercise of my discretion I consider factors such as the interest of justice.
  19. I also take into account the extent of delay, reasons given for the delay, whether there is an arguable defence and the interests of justice and whether the balance favours granting leave to file the Defence out time.
  20. The extent of the delay has been approximately 12 months which is significant, but not unprecedented.
  21. The reasons by the Defendants has been there was active mediation whose orders ran into December 2024, internal re-assignment occurred in April 2025, and instructions were sought until mid-2025. While not perfect, these are concrete administrative explanations, not mere inattention.
  22. The arguable defence which go to the heart of the substantive issues relating to responsibility including the National Capital District Commission and its role over provincial roads, the acquisition of part of Portion 1631 rather than the Plaintiff’s Portion 2733 and the contractor’s primary role. They also put in issue the trespass allegation and the proper party. These are not fanciful and warrant a pleaded Defence.
  23. This is a commercial public-law interface claim of consequence.
  24. The Fourth Defendant is a nominal defendant for monetary exposure.
  25. The Plaintiff will suffer limited prejudice capable of being addressed by timetable orders while by contract, outright refusal would shut out public-law defences in a case where responsibility for a public road is live.
  26. In this vein, I am persuaded to grant leave to the Second, Third and Fourth Defendants to file and serve their Defence out of time under Order 1 Rule 15 and Order 7 Rule 6 (2) of the NCR.

ORDERS

  1. The Third and Fourth Defendants’ application to dismiss the proceeding for alleged non-compliance with Section 5 CBASA is refused.
  2. The Third and Fourth Defendants’ application to dismiss the proceeding for want of a company resolution under section 138 and Schedule 4 Companies Act 1997 is refused.
  3. The Second to Fourth Defendants are granted leave under Order 1 Rule 15 and Order 7 Rule 6 (2) of the National Court Rules to file and serve their Defence out of time.
  4. The Defence is to be filed and served within 21 days of this order.
  5. Within 28 days, the parties are to confer and file a joint case-management statement proposing: (i) any preliminary questions, (ii) a discovery plan related to registered plans and acquisition files relevant to Portions 2733 and 1631, and (iii) whether targeted expert surveying evidence can be jointly obtained.
  6. Costs be in the cause.
  7. Time for entry of these Orders be abridged to the time of settlement by the Registrar which shall take place forthwith.

Ordered accordingly.
Lawyers for the plaintiff: Kandawalyn Lawyers

Lawyers for the first defendant: MMK Legal
Lawyers for the second, third and fourth defendants: Solicitor General


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