SC2081
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCA NO 101 OF 2011

TOALE HONGIRI INCORPORATED LAND GROUP
First Appellant

TIASAPI INCORPORATED LAND GROUP
Second Appellant

SOUWOLO INCORPORATED LAND GROUP
Third Appellant

SOUWOLO HAPOROPAKE INCORPORATED LAND GROUP
Fourth Appellant

V

WOLUTOU INCORPORATED LAND GROUP
First Respondent

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Second Respondent

RENDLE RIMUA, ACTING SECRETARY,
DEPARTMENT OF PETROLEUM AND ENERGY
Third Respondent

MICAH PITPIT, CHIEF COMMISSIONER, LAND TITLES COMMISSION
Fourth Respondent

LUHALIPU INCORPORATED LAND GROUP
Fifth Respondent

ASE TIPURUPEKE INCORPORATED LAND GROUP
Sixth Respondent

Waigani: Sawong J, Toliken J, Higgins J
2015: 1st July,
2016: 27th September

REAL PROPERTY – customary land – competing disputes over ownership – disputes before Land Titles Commission by virtue of a declaration by the Head of State (acting on advice) removing jurisdiction from Land Courts – Land Disputes Settlement Act Ch 45, s 4.

PRACTICE AND PROCEDURE – jurisdiction – whether National Court has jurisdiction to deal with disputes over customary land – whether the parties can by agreement remove matter from Land Titles Commission and place it before National Court – mediatory powers of National Court – whether a source of jurisdiction – National Court Act Ch 38. 

Competing claims of ownership regarding the customary land on which the Gobe oilfields is located were removed from the Land Disputes Settlement Ch 45 by a declaration by the Head of State (acting on advice) and referred to the Land Titles Commission for resolution under the Land Titles Commission Act 1963, and a Special Commissioner was appointed to hear the disputes. The Special Commissioner heard the disputes and delivered his declarations. Some of the parties were aggrieved by the declarations and filed for review under s 34 of the Land Titles Commission Act.  

A review panel consisting of the Chief Commissioner and two Commissioners heard the review and quashed the Special Commissioner's declarations and substituted these with its own orders. An appeal was lodged in the National Court against the decision of the Review Panel. The National Court quashed the decision of the review panel and remitted the matter to the Land Titles Commission for rehearing.

While awaiting the rehearing of the land disputes by the LTC, the disputing parties decided to try alternative dispute resolution. By a memorandum of understanding they resolved to appoint a Judge of the National Court to mediate their disputes. They further resolved to allow for certain benefits to be made to them while awaiting the resolution of the disputes. By ministerial determination under s 169A of the Oil and Gas Act 1998, 21 project area landowner beneficiaries were determined to share equity and royalty benefits. A subsequent ministerial determination made changes to the previous determination to include others including the present appellants.

In the meantime, Wolutou ILG (the first respondent) and others filed a writ of summons, WS 1177 of 2007, in the National Court against the State, the Chief Land Titles Commissioner and others, claiming that they had failed to reconvene the LTC hearings resulting in royalties and other benefits being paid to parties who were not the true landowners.

Mediation soon commenced, ostensibly on the back of the proceedings filed in the National Court. At the mediation, certain parties who had an interest in the Gobe lands, but who were strangers to the National Court proceedings, consented to certain orders which purportedly disposed of the proceedings and the competing claims of ownership to the Gobe lands, in the absence of the proper parties to the National Court proceedings including the appellants who were defendants in those proceedings. The Judge endorsed the purported consent orders.

The appellants applied to the Judge to set aside the orders, but their application was refused. They appealed against those orders principally on the grounds of denial of natural justice and lack of jurisdiction.

Held:

(1)	The purported consent orders were not consent orders within the meaning of s 14(2) of the Supreme Court Act.
(2)	While the plaintiffs in the WS proceeding sought certain relief from the National Court, which relief depended upon a claim of ownership to the disputed land, the parties in those proceedings were specific. None of the parties to the so-called consent orders sought leave to be joined, and it follows therefore that any actions by strangers in respect thereof, and any orders, whether consented to or not, emanating therefrom were a nullity.
(3)	The primary Judge, acting as mediator, erred in conducting the mediation on the back of the WS proceedings when the proper parties were not in attendance. And when the proper parties protested, his Honour further erred when he denied their application to have the orders set aside. They were thus driven from the judgment seat without being heard, and were denied natural justice.
(4)	Part IIA, and in particular Section 37B, of the National Court Act Ch 35, does not grant original jurisdiction in the National Court to deal with all manner of disputes. It merely provides for an alternative means of settling disputes through mediation in matters over which the court is properly seized of jurisdiction in the first place. The mediatory powers of the National Court do not found jurisdiction. They are procedural or adjectival powers only.
(5)	That being the case, the National Court cannot assume jurisdiction where none otherwise exists. Nor can the parties, by agreement, oust jurisdiction from a court or tribunal having original and/or exclusive jurisdiction in the matter and place it before the National Court.
(6)	In disputes over interests in customary land, the National Court (and the Supreme Court, or the District, or Village Courts for that matter) clearly lacks jurisdiction. Jurisdiction lies primarily with Land Courts established under the Land Disputes Settlement Act, and, in those special cases envisaged by s 4 of the Act, in some other tribunal appointed by the Head of State, acting on advice, such as the Land Titles Commission. 
(7)	The National Court therefore acted without jurisdiction in respect of the purported consent orders, and furthermore, did not have original jurisdiction to deal with WS 1177 of 2007, as the matter ultimately involved disputes over interests in customary land. The National Court proceedings were dismissed in their entirety for want of jurisdiction.
(8)	The competing claims of ownership to the Gobe lands must return to the Land Titles Commission for resolution, as it is the tribunal legally vested with jurisdiction, unless the Head of State, acting on advice, decides otherwise.
(9)	The appeal was allowed.
(10)	The fifth and sixth respondents and their lawyer shall pay the appellants’ costs of the appeal and the National Court proceedings on an indemnity basis.

Cases Cited

The following cases are cited in the judgment: 

Hegele v Kila [2012] 2 PNGLR 87
Iambakey Okuk & Independent State of Papua New Guinea v Gerald Sydney Fallscheer [1980] PNGLR 274
In the Matter of Appeals by Imawe Bogasi, Isewari Bupuku Gohu, Haporopake & Sumbala Clans, CA Nos 111, 134 & 190 of 2000, 04.12.00, unreported
Pila Niningi v Electoral Commission (2012) N4879
Soso Tumu v The State [2002] PNGLR 250
Toale Hongiri Incorporated Land Group & Others v Wolutou Incorporated Land Group & Others (2012) SC1201

Counsel

J Haiara, for the First and Second Appellants
N L Ako, for the Fourth  A ppellant
M Miva, for the First Respondent
P Ame, for the Fifth and Sixth Respondents

27th September, 2016

1.	BY THE COURT: The appellants, by way of an amended supplementary notice of appeal filed on 21 September 2011, appeal against the orders of the National Court made on 24 August and 13 September 2011 in respect of proceedings WS No 1177 of 2007. The orders were: 

1.	The customary landowners shown in Schedule 1 of this Order recognize each other's traditional land boundaries before the discovery of Oil and Gas in the Gobe Oil Development Areas known as PDL 3 and PDL 4 and the facilities area. 

2.	The customary owners in Schedule 1 acknowledge the Sowolo and Wolutou clans as clans having land in the PDL 3 and PDL 4 respectively and that as above.

3.	That the Department of Petroleum and Energy, the Mineral Resources Development Company (MRDC) and other relevant Government Institutions recognize only the clans in Schedule 1 as customary land owning groups in the Gabe PDL 3 and PDL 4 and the facilities area

4.	For the purpose of benefit sharing the landowners in Schedule 1 of this Order recognize their beneficiaries and negotiate benefit sharing.

5.	The parties be given 7 days to consolidate, agree and present to ADR Court the Benefit Sharing Agreement s (BSA) by parties named in Schedule 1, inclusive of Sowolo and Wolutou (Clans) and their beneficiaries. 

6.	The parties agree that all royalty and equity monies payable to the landowners however outstanding claims due held by the State and its agents particularly Department of Petroleum and Energy (DPE) and Mineral Resources Development Company to be paid into the National Court Trust Account pending further orders.

7.	The majority of principle landowners and their beneficiaries agree for 20% of all royalty and equity monies be set aside until the disputing parties settle their disputes. And 80% of the monies be made available for disbursement to the agreed parties according to the BSA.

8.	The matter return to Court with benefit sharing agreement on 13 September 2011 at 9.30 am.

SCHEDULE 1
(1)	Ase Tipurupeke Clan
(2)	Moloko Tipurupeke Clan
(3)	Haukerake Tipurupake Clan
(4)	Luhalipu Clan
(5)	Yenidou Bogasilan
(6)	Imawe Kewa Clan
(7)	Muti Clan
(8)	Isaweri Makof Clan
(9)	Makena Clan
(10)	Mukard Dupan Clan
(11)	Museneri Clan
(12)	Afu Clan
(13)	Wafi Clan
(14)	Lu'u Clan 

SCHEDULE 2
(1)	Sowolou Clan
(2)	Wolutou Clan

	And on 13 September 2011 the learned primary Judge: 

(a)	refused to revisit or set aside the orders made ex parte on 24 August 2011; and 

(b)	directed the appellants and other parties having problems or taking issue with the orders of 24 August 2011 to continue to negotiate with other parties with a view to resolving those disputes.

BACKGROUND

2.	The disputes over the customary ownership of the land on which the Gobe oilfields are located go a fair way back and it is perhaps instructive to make reference to that background history so that we can fully appreciate the issues involved here.

3.	It appears from the material in the appeal book (affidavit of Paul Sapake, sworn on 23 April 2008 and filed on 24 April 2008) that conflicting claims arose between various clans over an area generally described as Gobe and South East Gobe as a result of extensive prospecting and drilling by Chevron Niugini, the developers of the oil project there.

4.	All mediation attempts failed and the Head of State (acting on advice of the National Executive Council) declared that special circumstances existed for the disputes to be determined by means other than under the Land Disputes Settlement Act Ch 45 (LDSA) pursuant to s 4(3) of the that Act. The Head of State ordered that the disputes be determined under the Land Titles Commission Act 1963 and accordingly appointed Salika J (as he then was) as Special Commissioner to hear the competing claims.

5.	The competing claimants before the Special Commissioner were:

•	Songolo Hapropakes
•	Imawe Bogasi
•	Tipurupeke
•	Luhalipi
•	Luu
•	Yenido Bogas
•	Isawari Makof
•	Musoneri
•	Dipan
•	Wafi
•	lmawe Kewa
•	Yesiki
•	Muti
•	Bogoma Kuidobo
•	Isawari Bubuku Gohu
•	Yalla
•	Andei

6.	The Special Commissioner's adjudication area was described as:

All that land containing an area approximately 1082 square kilometres in the Gulf Province and the Southern Highlands Province covering the Kaiam village in the Gulf Province  then to the East towards Samberigi airstrip in the Southern Highlands Province and hence by a straight line to the junction of Mubi river and the Kikori river in the Gulf Province, thence following the south-westerly bank of the Kikori river to the point of commencement at Kaiam village.

7.	The Special Commissioner commenced his hearing on 8 May 1995 and rendered his declarations on 29 February 1996.

8.	These declarations were immediately taken up on review before a full tribunal of Commissioners (J Kanawi, Chief Commissioner, and Commissioners B Noki and C Malaisa), sitting as a Review Panel, pursuant to s 34 of the Land Titles Commission Act by the Yenidou Bogasi clan in respect of their claims against the Imawe Bogasi, Imawe Kewa, Isawer Makof and Luhalipu clans.

9.	On 19 May 2000 the Review Panel upheld the application for review and, among other things, declared new boundaries for the land owned by the applicants.

10.	These declarations were taken up on appeal to the National Court. Sheehan J allowed the appeal and remitted the whole matter to the Land Titles Commission for rehearing (In the Matter of Appeals by Imawe Bogasi,  Isewari Bubuku Gohu, Haporopake & Sumbala Clans, CA Nos 111, 134 & 190 of 2000, 04.12.00, unreported). See Soso Tumu v The State [2002] PNGLR 250 for an informative discussion by Kandakasi J of the history of these disputes.

11.	While the matter was still before the Land Titles Commission, the Minister for Petroleum and Energy, by National Gazette No G102 dated 24 June 2002, made a "Determination of Identification of Project Area Landowner Beneficiaries for the Sharing of Equity and Royalty Benefits ..." pursuant to his powers under Section 169A of the Oil and Gas Act 1998. The Minister determined a total of 21 landowner groups including lmawe Bogasi and further apportioned the percentages each group was to receive. The Wolutou ILG, Toale Hongiri ILG and Tia Sapi ILG were not included in the determination.

12.	Then, by National Gazette No G64 of 13 May 2003, the Minister varied the previous determination by deleting Imawe Bogasi from the schedule of landowners and substituting it with nine incorporated land groups which constituted the Imawe Bogasi clan. This included Toale Hongiri, Wolutou and Tia Sapi among others.

13.	Despite the ministerial determination under the Oil and Gas Act, the disputes over ownership persisted and remained unresolved by the Land Titles Commission.

14.	The Wolutou ILG led by Ope Hapueke then commenced WS No 1177 of 2007 (from which this appeal stems) in his capacity as Chairman, on behalf of himself and members of their ILG, initially against the State (first defendant), Chief Commissioner of Land Titles Commission (second defendant), Secretary of Department of Petroleum and Energy (third defendant), Managing Director of Mineral Resources Authority (fourth defendant) and Chairman of Petroleum Resources Gobe Limited (fifth defendant).

15.	Wolutou claimed that the first and second defendants were negligent in that they failed to expedite the Land Title Commission's rehearing to identify the true landowners of the Gobe project area resulting in royalty and equity monies being paid to other clans and ILGs including Toale Hongiri ILG who were not the true landowners, ultimately resulting in economic and financial loss to them (Wolutou).

16.	Holding themselves out as the true landowners, Wolutou therefore claimed damages, inter alia, for loss of fair and equitable percentage of revenue from equity and royalty benefits being distributed to groups or persons who are not true owners of the subject land, loss of royalty and equity and damages for deprivation of property pursuant to s 53 of the Constitution.

17.	On 5 May 2008 Toale Hongiri ILG and Tia Sapi ILG were ordered to be joined as the sixth and seventh defendants in the proceedings.

18.	On 19 May 2008 leave was granted to the plaintiffs to discontinue the proceedings against the third, fourth and fifth defendants, effectively leaving the State, the Land Titles Commission and Toale Hongiri ILG and Tia Sapi ILG as the only defendants.

19.	On 9 October 2008 leave was granted for the plaintiffs to amend the writ of summons and the statement of claim. These were accordingly amended.

20.	Directions were then issued by Kandakasi J for the matter to go to mediation pursuant to the National Court Act and the ADR Rules.

21.	Now, it appears that when the matter was referred for mediation, other claimants who were not parties to the proceedings joined in. The disputing parties, totalling 32, opted for Alternative Dispute Resolution (ADR) and entered into a Memorandum of Understanding]

(MOU) on 26 February 2009. Clause 13 of the MOU provided:

Where in the event any one or more clan[s] are still at dispute, during or after the ADR process, then those disputes will be isolated to themselves and shall not affect other clans that have no issue with the resolution reached by the ADR process. Those clans still in dispute are at liberty to have their dispute determined by the Land Titles Commission already appointed for the purpose.

22.	Clause 17 (appointment of facilitator/mediator) then provided that Kandakasi J, sitting alone or with co­mediators from the Federal Court of Australia or other sources, was to facilitate or mediate the disputes.

23.	Kandakasi J then proceeded to mediate the disputes and made certain orders that purportedly resolved the matters in disputes. This appeal stems from his Honour's orders.

24.	The background to the proceedings giving rise to this appeal is succinctly summarized by this Court in Toale Hongiri Incorporated Land Group & Others v Wolutou Incorporated Land Group & Others (2012) SC1201 (Cannings J, Sawong J, Collier J) when dealing with a challenge to the competency of this appeal. We adopt these for the purpose of the substantive appeal and set these out below:

The Orders made by his Honour on 24 August 2011 appeared to finalise the results of alternative dispute resolution (ADR) of landownership disputes concerning the Gobe Oil Fields. It seems to be common ground that a land dispute first arose in Gobe with the discovery of the Gobe Oil Fields in the Southern Highlands Province and Gulf Province in 1991. Several Land Titles Commission hearings were held in relation to the dispute, and by consensus the parties entered into a benefit sharing agreement called “the Lae-Inter Agreement”. Thereafter a Ministerial Determination was made, whereby the disputants received interim beneficiary rights and an entitlement to receive royalty and equity. Those rights were conferred on the basis that they would lapse at the commencement of the landownership determination process. As it transpired, all thirty-two Incorporated Land Groups (“ILGs”) with an interest in the dispute opted for resolution of land ownership by way of ADR. Terms of Reference (“TOR”) were developed in 2009 to facilitate that process.

On 23 August 2011 Luhalipu Incorporated Land Group and Ase Tipurupeke Incorporated Land Group presented “draft consent orders” to the Court for endorsement. The draft consent orders were as follows:

1.	The customary landowners shown in Schedule 1 of this Order recognize each other traditional land boundaries before the discovery of Oil and Gas in the Gobe Oil Development Areas known as PDL 3 and PDL 4 and the facilities area.
2.	The customary landowners in Schedule 1 acknowledge the Souwolo and Wolotou clans as clans having land in the PDL 3 and PDL 4 respectively and that as above.
3.	That the Department of Petroleum and Energy, Mineral Resources Development Company (MRDC) and other relevant Governmental Institutions recognize only the clans in Schedule 1 as customary land owning group in the Gobe PDL 3 and PDL 4 and the facilities area.
4.	That for the purpose of benefit sharing, the landowners in Schedule 1 of this Order recognize their beneficiaries and negotiate benefit sharing.
5.	That parties be given 7 days to consolidate, agree and present to ADR Court the Benefit Sharing Agreements (BSA) by parties named in Schedule 1, inclusive of Souwolo and Wolotou ILG (Clans) and their beneficiaries.
6.	That parties agree that all royalty and equity monies payable to the landowners however outstanding claims due held by the State and its agents, particularly Department of Petroleum and Energy (DPE) and Mineral Resources Development Company to be paid into the National Court Trust Account pending further Orders.
7.	That the majority of principle landowners and their beneficiaries agree for 20% of all royalty and equity monies to be set aside until disputing parties settle their disputes. And 80% of the monies be made available for disbursement to the agreed parties according to the BSA.
8.	Matter returns to the Court at 9.30 am on 13 September 2011 with BSA.

SCHEDULE 1
(1)	Ase Tipurupeke Clan
(2)	Moloko Tipurupeke Clan
(3)	Haukerake Tipurupeke Clan
(4)	Luhalipu Clan
(5)	Yenidou Bogasi Clan
(6)	Imawe Kewa Clan
(7)	Muti Clan
(8)	Isaweri Makof Clan
(9)	Makena Clan 
(10)	Mukard Dupan Clan
(11)	Museneri Clan
(12)	Afu Clan
(13)	Wafi Clan
(14)	Lu’u Clan

SCHEDULE 2
(1)	Souwolo Clan
(2)	Wolotou Clan

The matter was stood over overnight and returned to Court on the morning of 24 August 2011. After an interchange between his Honour and Mr Ame (for the applicants presenting the draft consent orders, namely Luhalipu Incorporated Land Group and Ase Tipurupeke Incorporated Land Group), Mr Palma for the Department of Petroleum and Energy, and Mr Uyassi for the Waiyemi clan, his Honour made “consent” Orders in the same terms as those presented. It is not in dispute that:

•	At the time of those orders, none of the customary landowners identified in Schedule 1 were parties to the proceedings (although two subsequently became the fifth and sixth respondents to the appeal currently before the Court).

•	The only parties to the proceedings at the time of the orders of 24 August 2011 were Wolotou ILG as plaintiff, and the following parties named as defendants:
o	Independent State of Papua New Guinea (first defendant);
o	Micah Pitpit – Commissioner Land Titles Commission (second defendant);
o	Toale Hongiri ILG (third defendant);
o	Tiasapi ILG (fourth defendant); and
o	Rendle Rimua – Secretary Department of Petroleum & Energy (fifth defendant).

•	The current appellants before the Court, namely the third and fourth defendants in the proceedings before the National Court, were not parties to the “consent” Orders. Further, it is clear that: 
o	they were not informed that the matter was being heard by his Honour on 24 August 2011;
o	they were not informed that the draft consent orders were being presented to his Honour; and
o	they were not present in Court on 24 August 2011 when the relevant Orders were made.

Appeal and associated events

On 2 September 2011 the appellants filed a notice of appeal against his Honour’s Orders. The appellants contended, inter alia, that:

•	His Honour was aware that the appellants were represented by Steeles Lawyers together with a number of other clans but failed to enquire whether the appellants were represented and had consented to the draft consent orders put before his Honour on 24 August 2011.
•	His Honour failed to conduct due and proper enquiries to ascertain whether or not the appellants were aware of the proposed consent orders and had endorsed the proposed consent orders.
•	His Honour failed to adjourn the matter to another date to enable the appellants to appear and be heard prior to making Orders in circumstances where there was no proper application before the Court and the appellants were neither notified nor aware of the matter being heard.
•	The “consent” Orders were in substantially different terms from the agreement reached between the disputing parties during the ADR process at Gobe in 2009.

The appellants also filed an application for stay of his Honour’s Orders on 6 September 2011.

The parties returned before his Honour on 13 September 2011. At the hearing, the parties who are now the appellants informed his Honour that they had filed an appeal in the Supreme Court and submitted that further negotiation with other parties was pointless in light of Orders made by the Court. The appellants also sought orders from his Honour, including orders setting aside the “consent” Orders made on 24 August 2011. His Honour declined to make such orders.

In the Supplementary Notice of Appeal filed 14 September 2011 the appellants further complained that:
•	his Honour refused to revisit or set aside the Orders of 24 August 2011; and
•	rather – his Honour directed the appellants and other parties to continue negotiating to resolve outstanding issues.

On 13 September 2011 further parties were joined as parties to the appeal. On 23 September 2011 the Supreme Court ordered that the enforcement of the Orders of 24 August 2011 and the conduct of subsequent proceedings be stayed pending determination of the appeal to the Supreme Court against his Honour’s Orders.

As his Honour’s Orders of 24 August 2011 were predicated on draft consent orders, no reasons for judgment were given. His Honour’s reasoning of 13 September 2011 for refusing to set aside his previous Orders or stay those Orders is apparent from the transcript of that hearing. 

26.	The above basically also summarizes the pertinent facts upon which this appeal will turn.

GROUNDS OF APPEAL

27.	The grounds of appeal are as follows:

3.1 (a) Under all the circumstances of the case the judgment and orders of 	the learned Judge is unfair, harsh and oppressive having regard to 	and for reasons that when the learned Judge was conducting 	hearing on 24th August 2011:-
[1] failed to satisfy itself that the Appellants and the other parties in the proceedings were served and notified of the matter returning in Court for hearing.
[2] the learned Judge as facilitator of the Gobe ADR process was aware that the Appellants were represented by Steeles Lawyers together with five other clans of the Imawe Bogasi clan except two sub-clans in Wolotou and Yenidou Bogasi ILGS.
[i] but failed to enquire whether the appellants were represented or present in Court and had consented to the orders proposed for endorsement by Ame Lawyers.
[ii] failed to conduct due and proper enquiries so as to ascertain whether or not:-
[A] Appellants were aware of the orders proposed for endorsement by Ame Lawyers; and
[B] had endorsed the Orders.
[3] learned Judge erred in law in failing to adjourn the matter to another date so as to enable the Appellants to appear and be heard prior to making the Orders in circumstances where there was no proper application before the Court and appellants were neither notified nor aware of the matter being heard and have not formally endorsed the Orders in accordance with ordinary practice.
(b) The learned judge erred in law and the Judgment and the Orders are irregular in that, the Appellants were completely omitted from being heard on 24th August 2011 thereby denying them natural justice.
(c) the learned judge erred in law in making orders which were substantially different from the agreement reached between the disputing parties during ADR process at Gobe in 2009 which the learned judge had facilitated and was aware of.
(d) The learned judge erred in law in failing to find that the Imawe Bogasi clan which the appellants are part of was identified and agreed as the major customary landowner of both the Gobe PDL 4 and PDL 3 areas during the Gobe ADR process, which the learned judge had facilitated and was aware of but omitted the Appellants as landowners in the orders made by the Court.
(e) The learned judge erred in law in making the orders he did on 24th August 2011 when the National Court lacked jurisdiction pursuant to section 15(1) of the Land Titles Commission Act 1962 when the matter was before the Land Titles Commission for rehearing.
(f) The learned judge erred in law in making the Orders he did which were not similar to the agreement reached by the parties during the Court sanctioned ADR process at Gobe. 
(g) The Learned Judge erred in law in conducting further hearing of the proceedings on 24th August 2011 when there was no provision in the Terms of Reference for Mediation and or in the various Mediated Agreement for the Court to make the Orders made by Court on 24th August 2011.
(h) The Learned Judge erred in law in conducting further hearing of the proceedings after the conclusion of the ADR process instead of referring the unresolved disputes to the Land Titles Commission for determination pursuant to Clause 13 of the Terms of Reference for Mediation and thereby the Court being functions officio.
3.2 During the conduct of the hearing on 13th September 2011;
(i) The Learned Judge erred in law in refusing to set aside the Orders of the Court made on 24th August 2011, when the Appellants, the First Respondent and the Souwolo and Moloko Tipurupeke clans informed the Court that they never consented to the Orders of the Court made on 24th August 2011 and take issue with those orders but instead directed the aggrieved parties to negotiate further with the other parties to reach compromise agreement in circumstances where;
[1] The formal ADR process had been completed in 2009;
[2] Clause 13 of Terms of Reference [TOR] provides for unresolved disputes to be referred to LTC for determination.
[3] The LTC was therefore seized of the unresolved disputes pursuant to Clause 13 of TOR.
[4] National Court was functions officio and lacked jurisdiction.
(j)The Learned Judge erred in law in directing those parties and clans still having issues with the Court Orders of 24th August 2011, including the Appellants herein to continue to negotiate in circumstances where:-
[1] the Orders of the 24th August 2011 finally disposed of all the customary landownership issues in respect of Gobe Petroleum Project Areas; PDL 3 and 4; and
[2] the only issue to be negotiated and agreed was benefit sharing by those persons identified by the Court per Schedules 1 and 2 of the Court Orders.
(k) And as a consequence of the learned judge proceeding to hear and determine the issue of customary landownership in the absence of the Appellants on 24th August 2011 without their consent as aforesaid and refusing to set aside the Orders on 13th September 2011 there was a miscarriage of justice.

ORDERS SOUGHT

1 The Appeal be upheld. 
2 The orders of the National Court made 24th August 2011 be quashed.
3 The National Court be declared functus officio in respect of further conduct of proceedings WS No. 1177 of 2007.
4 The matter be referred to the Land Title Commission for rehearing of the rem ai n in g disputes pursuant to Clause 13 of the Terms of Reference.
5 Mr Ame of Ame Lawyers be referred to the Lawyers Statutory Committee for disciple.
6 Cost of the proceedings on full indemnity basis against the respondents and Ame Lawyers.
7 An interim stay of enforcement of the Orders of the National Court made 24th August 2011 and stay of further conduct of proceedings WS No 1177 of 2007 pending hearing and determination of this appeal.
8 The time for entry of the Orders be abridged.

28.	At the hearing of the appeal, Mr Haiara for the first and second appellants, abandoned grounds 3 (c)(d)(f), 3.2 (i) and (k). The rest of the grounds remain. These can be brought under two main grounds: (1) denial of natural justice; and (2) lack of jurisdiction.

29.	Mr Miva, for the first respondent, also submits that the appeal should be allowed.

ISSUES

30.	Hence the issues for determination are:

1.	Whether the orders were unfair, harsh and oppressive resulting in a breach of natural justice.

2.	Whether the National Court had jurisdiction to endorse or make orders appealed against.

THE APPEAL

ISSUE NO 1: WERE THE ORDERS APPEALED AGAINST UNFAIR, HARSH AND OPPRESSIVE, RESULTING IN  BREACH OF NATURAL JUSTICE? 

31.	It must be stated quite categorically at this stage that the orders appealed against were not only dispositive in nature, but also not "consent orders" as noted by the Court in the competency hearing to this appeal. It said:

The Orders of his Honour made on 24 August 2011 were not "consent orders" within the meaning of s 14(2) of the Supreme Court Act. They were obtained by persons who were not parties to the proceedings, in the absence of persons who were parties to the proceedings.

32.	The Court there basically agreed with the observations of Injia CJ on 23 September 2011, when granting a stay on the enforcement of the Court's Order of 24 August 2011, where his Honour said:

It is clear to me that the order was dispositive of the substantive claim in the WS proceedings as it gave full effect to the various agreements that were concluded under a Court-annexed ADR process that was facilitated by the Court, involving accredited mediators. ...

I am satisfied that the orders made were final in nature in that parts of the order finally disposed of the rights of the parties including the appellants, in particular the first respondent who is the principal plaintiff in the WS proceedings.

33.	The order purportedly resolved the long running disputes over the customary ownership of the land on which PDL 3 and PDL 4 are located

34.	Mr Haiara, for the first and second appellants, submitted that they were denied natural justice and that the orders were unfair, harsh and  oppressive. He relied on Iambakey Okuk & Independent State of Papua New Guinea v Gerald Sydney Fallscheer [1980] PNGLR 274.

35.	There is no dispute that the beneficiaries of the orders in question were strangers to the proceedings before the primary Judge. There 	is no dispute that the appellants were not aware that the matter was to be heard on 24 August 2011. They were not involved in 	negotiations with other disputing clans. Nor were they present when certain agreements were reached. And therefore, they  were not present on 24 August 2011 when the draft consent orders were presented and endorsed.

36.	There is also no dispute that the parties named in Schedule 1 of the Orders in question were not parties to the matter before his Honour.

37.	There is further no dispute that his Honour refused to hear the appellants when they brought to his Honour's attention that they were not privy to the purported consent orders. His Honour refused to set aside the orders.

38.	So did his Honour act unfairly, harshly, oppressively or deny the appellants natural justice?

39.	The starting point for a plea for denial of natural justice is s 59 of the Constitution which provides -

(1) Subject to this Constitution and to any statute, the principles of natural justice are the rules of the underlying law known by that name developed for control of judicial and administrative proceedings.

(2) The minimum requirement of natural justice is the duty to act fairly and, in principle, to be seen to act fairly.

40.	The appellants advance several propositions to support their contention as we have seen above.

41.	The principles of the requirement to observe principles of natural justice are now settled. 

42.	There is no doubt in our minds that justice was denied to the appellants, first, by what appears to be a hijack of their proceedings by strangers, and secondly by the refusal of the primary Judge to set aside his orders.

43.	It appears to us that the parties to the so-called consent orders piggy-backed on WS 1172 of 2007 in their haste to bring about a quick solution to their long-running dispute over the Gobe lands. That they chose ADR instead of litigation is commendable. Parties must be encouraged to resolve their land disputes – which are often acrimonious, protracted and never seem to end – amicably for lasting solutions. However, the disputes in the instant case were before another tribunal, the Land Titles Commission, which was seized of exclusive jurisdiction, specifically for those disputes. We will say a bit further on this when we address the issue of lack of jurisdiction.

44.	While the plaintiffs in the WS proceeding sought certain relief from the National Court, which relief depended upon a claim of ownership to the disputed land, the parties in those proceedings were specific. None of the parties to the so-called consent orders sought leave to be joined, and it should follow that any actions by strangers in respect thereof, and any orders, whether consented to or not, emanating therefrom, are a nullity.

45.	The primary Judge, acting as mediator, erred in conducting his mediation on the back of court proceedings when the proper parties were not in attendance. Once the proper parties were sidelined, or kept in the dark, as it were, the proceedings took on a completely different character altogether.

46.	That the claim in the WS proceeding was based on a claim of ownership to the land in question, which the parties to the so-called consent orders also had an interest in, was a fact that was obvious to the Judge-cum-mediator. However, the proper parties were not present. Instead the Judge allowed strangers in, who, for their part, kept the proper parties in the dark and negotiated a purported agreement that effectively resolved the competing interests in the subject land. These strangers acted dishonestly and deceitfully, and unfortunately their scheme escaped judicial scrutiny.

47.	And when the proper parties protested, his Honour further erred when he denied their application to have the orders set aside. They were thus driven from the judgment seat without being heard, and hence were denied natural justice.

48.	The appeal should therefore be allowed on this ground alone. However, it is important to consider the second issue as well.

ISSUE NO 2: DID THE NATIONAL COURT HAVE THE JURISDICTION TO DEAL WITH THE MATTER?

49.	This is an important issue because the matter involved longstanding unresolved disputes regarding customary ownership of the Gobe lands, which, were still before the Land Titles Commission (Commission). The matter, as we have seen, was remitted by Sheehan J to the Commission for rehearing. While awaiting a rehearing by the Commission the parties agreed to try ADR and bring their disputes outside of the jurisdiction of the Commission.

50.	In our opinion, the issue not only involves the National Court's power to mediate the dispute, but also whether it was seized of jurisdiction to deal with WS 177 of 2007 in the first place and make dispositive orders.

51.	Other questions that necessarily arise are: (1) Can the parties by agreement excuse themselves from the jurisdiction of the Commission? (2) Can they then avail themselves of the mediatory jurisdiction of the National Court? (3) When the National Court mediated the matter and made the orders appealed against, which, as we have seen, purportedly resolved the competing interests of the parties named in the orders (albeit strangers to the proceedings) did it have the jurisdiction to do so when the substantive matter involved disputes regarding interests in customary land?

52.	Before we answer these questions, it is instructive to say something about where the jurisdiction to deal with customary land disputes lies, without going too far back into our legal history.

53.	Prior to Independence, s 15(1) of the Land Titles Commission Ordinance 1963 vested exclusive jurisdiction to deal with disputes concerning interests in customary land in the Land Titles Commission. Section 15 stated:

The Commission has, subject to this Act, exclusive jurisdiction to hear and determine all disputes concerning and claims to the ownership by custom of, or the right by custom to use, any land, water or reef, including a dispute as to whether any land is or is not customary land and ma y make all such preliminary inquiries and investigations as it deems necessary for the purpose of hearing and determining the disputes and claims.

54.	The Commission's exclusive jurisdiction, however, ended with the passage of the Land Disputes Settlement Act 1975 (LDSA).

55.	The LDSA was enacted in 1975 largely out of recommendations in 1973 by the Commission of Inquiry into Land Matters (CILM). The CILM, among other things, recommended that jurisdiction to hear disputes over interests in customary land be removed from the Land Titles Commission.

56.	The CILM also viewed the Commission as far too removed from the people and not involving people in the settlement of their disputes through mediation, a power which the Commission had. The CILM therefore recommended that a decentralized three-tier system of compulsory mediation, followed by arbitration and appeal be established to take over the functions of the Land Titles Commission. Such a system would largely involve the resolution of disputes by the parties themselves principally through customary dispute settlement processes. Arbitration was the last resort. Hence the enactment of the LDSA to specifically deal with customary land disputes by the Land Courts.

57.	Section 66 of the LDSA which divested the Commission of its jurisdiction provides:

(1)	Where a Local Land Court is established under Section 21 in and for a province, the Land Titles Commission—

(a)	ceases, subject to Subsection (2), to have jurisdiction to and in relation to land to which this Act applies in the province; and
(b)	shall, as soon as practicable after the Court is established, notify the Provincial Land Court for that province as to all disputes to which this Act applies that are the subject of an application before the Land Titles Commission and have not been heard and determined by the Commission.

(2)	Subsection (1) does not apply to or in relation to applications under Section 9 of the Land Act 1996.

(3)	Where a Local Land Court is established under Section 21 in and for a province, Local Courts cease to have jurisdiction under Section 15A of the Land Titles Commission Act 1962 (Adopted), in relation to land to which this Act applies in the province.

(4)	The Provincial Land Court may request a Land Mediator to mediate any dispute notified to it under Subsection (1)(b) in accordance with this Act.

58.	Local and Provincial (District) Land Courts were established for all provinces by National Gazette No G27 of 1 April 1976. And by the same Gazette, Local Court and District Court Magistrates were appointed as Local and District (Provincial) Land Magistrates respectively.

59.	As a consequence, the Land Titles Commission ceased to have general  jurisdiction over customary land disputes in the country. The only jurisdiction that the Commission has retained under s 15 of its enabling Act is over disputes on whether land is, or is not, customary land.

60.	Conversely the Land Courts do not have the jurisdiction to hear a dispute as to whether land is, or is not, customary land. That power remains the exclusive jurisdiction of the Commission (s 3(2)(a) of the Land Disputes Settlement Act). The Commission does, however, have other jurisdiction under the Land (Tenure Conversion) Act 1963 and s 9(2) of the Land Act 1996 (appointment of agent for customary landowners where State acquires customary land).

61.	Now, s 4 of the Land Disputes Settlement Act envisaged that certain disputes of national interest, where attempts for amicable settlement had failed, may be removed from the Land Courts by declaration by the Head of State (acting in on advice) and resolved by other means. Section 4 provides:

(1)	Where the Head of State, acting on advice, is of the opinion that special circumstances exist that require a dispute to be settled by means other than those provided by this Act, the Head of State, acting on advice, may, by notice in the National Gazette, declare that this Act does not apply to the dispute.

(2)	Without limiting the generality of Subsection (1), the matters that may be taken into account in determining whether special circumstances exist within the meaning of that subsection include the following:—

(a)	that the dispute is of long standing and that previous attempts at mediation have failed; and
(b)	that the dispute has already resulted in serious breaches of the peace; and
(c)	that there is no possibility of agreement being reached between the parties to the dispute; and
(d)	that it is in the national interest that the dispute be settled in some other manner.

(3)	The Head of State, acting on advice, may, by regulation, determination or order, make provision for the settlement of a dispute to which Subsection (1) applies.

62.	Section 4 of the Land Disputes Settlement Act was invoked to grant jurisdiction to the Commission in respect of the Gobe disputes. It is clear then that the Commission did not assume automatic jurisdiction. It only became seized of the matter by a declaration by the Head of State under s 4 of the Act.

63.	And as we have seen, the disputes in question were before the Commission for rehearing when the parties decided to mediate as a means of resolving the disputes; though, it appears to us, that this approach was taken more or less to allow the various claimants access to benefits.

64.	This was odd, to say the least, because one would have thought that benefits would be payable only to genuine landowners (or right holders), ie those parties who were owners or who had some lesser rights to the subject land. And that was yet to be resolved by the Commission. But even if they did resolve their disputes they needed to go back to the Commission to have their agreements endorsed or formalized. That did not happen.

65.	The appellants in this matter argue that the National Court had no jurisdiction to deal with the issue of ownership of the Gobe lands. They argue that jurisdiction was vested in the Commission by s 15 of its enabling	Act. The Commission did not, however, derive its jurisdiction from s 15, but rather through a declaration by the Head of State under s 4 of the Land Disputes Settlement Act as we have seen. Needless to say, the appellants conceded though that while the National Court has the power to mediate the dispute, jurisdiction in this matter was vested elsewhere.

66.	There is no question that the National Court does have the power to mediate disputes that are brought before it. That power is vested by Part IIA of the National Court Act.  Section 7B provides:

(1)	In addition to the jurisdiction vested in the Court by Section 166 of the Constitution, and any other law, the Court—

(a)	may order a resolution of a dispute or a matter before it by mediation for an amicable resolution of the dispute; or
(b)	may order or direct a proceeding or any part of the proceeding to be inquired into and resolved by an appropriately qualified and experienced person or an expert in the issue.

(2)	At any stage of a proceeding, the Court may, whether with or without the consent of the parties, order that the proceeding or a part of the proceeding before it be referred to mediation.

(3)	Where the Court decides to refer a matter to mediation the presiding judge—

(a)	may, with the consent of the parties, conduct the mediation; or
(b)	may with the parties' consent appoint a mediator of their choice to conduct the mediation; or 
(c)	may failing the consent of the parties appoint a mediator from the Court's list of approved mediators.

67.	A Judge may appoint a mediator or mediate the dispute himself or herself (s 7B(3)(a)(b)). And where a settlement is reached, the court may with the consent of the parties embody the terms of the settlement in a consent order disposing of the proceedings or that part of the proceeding to which it relates (s 7D(3)).

68.	Now, it is important to point out that Part IIA and in particular s 37B of the Act do not grant original jurisdiction in the National Court to deal with all manner of disputes. This Part merely provides for an alternative means of settling disputes through mediation in matters over which the court is properly seized of jurisdiction in the first place. The mediatory powers of the National Court do not found jurisdiction. They are procedural or adjectival powers only.

69.	That being the case, the National Court cannot assume jurisdiction where none otherwise exists. Nor can the parties, by agreement, oust jurisdiction from a court or tribunal having original and/or exclusive jurisdiction in the matter and place it before the National Court.

70.	Hence, in disputes over interests in customary land, the National Court (and the Supreme Court or even the District or Village Courts for that matter) clearly lack jurisdiction. Jurisdiction lies primarily with Land Courts under the Land Disputes Settlement Act, and, in those special cases envisaged by s 4 of the Act, in some other tribunal appointed by the Head of State, acting on advice, such as the Land Titles Commission, as the practice seems to have been.

71.	Jurisdiction may well be vested in the National Court by a declaration by the Head of State acting on advice. There is no impediment to that, and because the Court has both mediatory and adjudicative powers, together with well-developed procedures, that may very well be the preferred option, judging by the present extensive use of the ADR process in the high impact projects. However, there must be a declaration by the Head of State to vest jurisdiction in the Court. Failing that, the National Court will be acting without jurisdiction if it attempts to deal with customary land disputes whether through mediation or otherwise.

72.	As the Supreme Court (Cannings J, Sawong J, Logan J) said in Hegele v Kila [2012] 2 PNGLR 87, following a long line of authorities: 

If the cause of action requires the Court to determine ownership of customary land the Court will lack jurisdiction as it is a well settled principle that the National Court (and also the Supreme Court) has no jurisdiction to hear or determine disputes about ownership of customary land (The State v Lohia Sisia [1987] PNGLR 102; Sioti Bauf and Lavoi Nodai v Poliamba Pty Ltd [1990] PNGLR 278; Golpak v Kali[1993] PNGLR 491; Siaman Riri v Simian Nusai (1995) N1375; Ronny Wabia v BP Exploration Co Ltd [1998] PNGLR 8; Soso Tomu v The State (2002) N2190). 

73.	So, what was or were the issue or issues that were referred to the National Court for mediation? Did they involve interests in customary land?

74.	The answers to these questions lay in the original case that gave rise to the orders appealed against. As we have seen, the plaintiff (the Wolutou Incorporated Land Group) claimed that the first and second defendants (The State and Micah Pitpit as Chief Land Titles Commissioner) were negligent in that they failed to expedite the Land Title Commission's rehearing to identify the true landowners of the Gobe Project Area resulting in royalty and equity monies being paid to other clans and ILGs including Toale Hongiri ILG who were not the true owners, ultimately resulting in economic and financial loss to them.

75.	Even though they did not plead explicitly that they were the true owners of the disputed land, the fact that they claimed damages, inter alia, for loss of fair and equitable percentage of revenue from equity and royalty benefits being distributed to groups or persons who are not true owners of the subject land, loss of royalty and equity and damages for derivation of property pursuant to s 53 of the Constitution, clearly implied that they were claiming to be the true landowners, a claim that would be disputed by other claimants including the current appellants.

76.	The plaintiffs’ claims were clearly based on a claim to ownership of the land in dispute. It follows therefore that they were before the wrong tribunal, and the National Court ought not to have heard the matter at all. It clearly did not have jurisdiction.

77.	It might be worth mentioning in passing here, that the National Court is not entirely without jurisdiction in respect of matters brought under the Land Titles Commission Act. Under Section 31B of the Act, where a dispute before the Commission involves the question of whether or land is customary or not, the parties may apply to have the matter removed to the National Court and heard there instead. Unfortunately, the disputes over the Gobe lands were, however, of a different nature and the parties could not therefore have had recourse to this provision.

78.	It must be mentioned also that the Commission, before which the Gobe disputes were pending, does have the power to mediate disputes before it. Section 25A of its enabling Act provides:

(1)	At any stage of a hearing before the Commission under this or any other Act, the Commission may mediate between the parties in order to effect a settlement of any matter in dispute. 

(2)	The Commission may adjourn the hearing if it appears that by doing so a settlement may be arrived at by the parties.

79.	Section 38B further provides for settlement of disputes in the fallowing terms: 

(1)	At any stage of any hearing or proceedings before the Commission or the National Court under this Act or the New Guinea Land Titles Restoration Act 1951, the parties may agree upon an amicable settlement of the matter, upon such terms and conditions as are agreed upon.

(2)	The agreement for settlement may include a waiver of any rights or alleged rights by any party, including—

(a)	the Custodian for Trust Land in any capacity, in defeasance of the rights of any person holding under or through him; and
(b)	the owners or alleged owners of any customary land not only on behalf of themselves but also on behalf of all other persons who would otherwise have subsequently become entitled to the land by custom, and in defeasance of the customary rights of those persons.

(3)	An agreement for settlement shall be made or incorporated into the decision of the Commission on the matter in question or the decision of the National Court on appeal, as the case may be, unless the Commission or the Court is satisfied that it would be improper so to do.

(3A)	Where an agreement for settlement provides for payment of compensation, that provision may be enforced—

(a)	where the amount or value of the compensation, as agreed, does not exceed K2000—as if it were an order of a District Court; and
(b)	where the amount or value of the compensation, as agreed, exceeds K2000—as if it were an order of the National Court.

(4)	For the purposes of any appeal to or from the National Court, a refusal to make or incorporate an agreement for settlement into a decision of the Commission or the National Court shall be deemed to be a decision or order of the Commission or the Court, as the case may be.

80.	As we have seen, the parties to the Gobe lands dispute had opted to try ADR to resolve their disputes which as we said is commendable and should be encouraged. However, such must be done within the confines of the relevant legislation and before tribunals that have appropriate original jurisdiction.

81.	The proper thing for the parties and lawyers to have done in the current case, was to seek a direction from the Commission for mediation, and a further direction that such mediation be conducted under the ADR Rules.

82.	If that was done and the parties reached an amicable and lasting settlement to their disputes, then they ought to have returned to the Commission for the terms and conditions of the settlement to be incorporated into the decision or declaration of the Commission. That unfortunately was not done.

83.	The National Court therefore acted without jurisdiction and the appeal should accordingly be allowed also on this ground.

CONCLUSION

84.	The purported consent orders appealed against should therefore be quashed.

85.	And finally, having found that the National Court acted without jurisdiction in respect of the purported consent orders, and further that it did not have original jurisdiction to deal with WS 1177 of 2007, as the matter ultimately involved disputes to customary land, those proceedings should be dismissed in their entirety for want of jurisdiction.

86.	Those disputes must return to the Land Titles Commission for resolution, as the tribunal legally vested with jurisdiction, unless the Head of State, acting on advice, decides otherwise.

COSTS

87.	The appellants have asked for costs on an indemnity basis against the fifth and sixth respondents’ lawyers and has put them on notice in the relief sought in the notice of appeal.

88.	The fifth and sixth respondents have failed to address this issue in their written submissions.

89.	An award of costs on an indemnity basis is discretionary. This discretion must be exercised judicially. The applicant must show that he or it has incurred costs unnecessarily as a result of the improper conduct of the fifth and sixth respondents’ lawyers. The appellants must show that their lawyers acted improperly, or other misconduct (Pila Niningi v Electoral Commission (2012) N4879).

90.	In the present case, it is clear to us from what we have said in the main part of this decision that the appeal emanated from deliberate and improper conduct by the fifth and sixth respondents and their lawyers. It is clear to us that Mr Ame and his clients acted and maintained improper conduct in the way they obtained the consent order in the National Court. Even when it was obvious that the consent orders were obtained irregularly, they and their lawyers acted improperly in opposing the application by the appellants to set it aside. Even in this Court they have maintained that the orders were properly obtained when it was crystal clear that those orders were obtained irregularly.

91.	In the circumstances the fifth and sixth respondents and Mr Philip Ame shall pay the appellants’ and the first respondent’s costs on  an indemnity basis.

ORDER

1.	The appeal is upheld.

2.	The consent orders of 24 August 2011 are quashed.

3.	Proceedings WS 1177 of 2007 are dismissed in their entirety for want of jurisdiction.

4.	It is directed that those disputes over the Gobe Lands be returned to the Land Titles Commission for resolution unless the Head of State declares otherwise.

5.	The fifth and sixth respondents and Mr Philip Ame shall pay the appellants’ and the first respondent's costs of the appeal and the National Court proceedings on an indemnity basis.

Haiara's Legal Practice: Lawyers for the First & Second Appellants
Pac– Oceania Lawyers: Lawyers for the First Respondent
Boma Lawyers: Lawyers for the Fourth Respondent	
Ame Lawyers: Lawyers for the Fifth & Sixth Respondents