SC1721

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

Consolidated appeals
SCA NO. 41 of 2016
and
SCA NO. 57 of 2016

BETWEEN:
KEIN WANIRE in his personal capacity and in his capacity as the Leader of Moroka and Hagari clan of Erudabuna Village, Koiari LLG, Central Province
Appellant

AND:
CHILLION BILOI as the Chairman of the Kodu Resources Owners Association Inc
First Respondent

AND
KODU RESOURCES OWNERS ASSOCIATION INC
Second Respondent

AND
INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

Waigani: Collier, Polume-Kiele and Lindsay JJ
2018: 26 June and 26 October

Cases Cited:
Papua New Guinea Cases

Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3950
Kiee Toap v the State (2004) N2731
PNG Forest Products Pty Ltd v the State [1992] PNGLR 85
Michael Kuman of Michael Kuman & Ors v Digicel (PNG) Ltd [2013] SC 1232
PNG Forest Products Pty Ltd and Inchape Berhad v The Independent State of Papua New Guinea and Jack Genia, The Minister for Forests [1992] PNGLR 85
Takori v Yagari (2008) SC 905

Overseas Cases
Dyson v Attorney-General [1911] 1 KB 410
Nagle v Feilden [1996] 1 All ER 689
Republic of Peru v Reuvian Guano Company (1887) 36 Ch D 489

Legislation cited:

Supreme Court Act 1975
National Court Rules
Supreme Court Rules

Counsel:

K Maliso, for the Third Respondent

REASONS FOR JUDGMENT

26th October, 2018 

1.   BY THE COURT: INTRODUCTION: This consolidated appeal involves two notices of appeal, filed on 11 April 2016 and 9 May 2016 respectively. Those proceedings were filed by two different firms of lawyers, both acting on behalf of the appellant, and both sought to appeal against the same decision, being the orders of the National Court made on 30 March 2016 in the proceeding WS No 456 of 2015. Those orders had the effect of dismissing the proceeding before the National Court on the basis that the appellant’s Statement of Claim disclosed no reasonable cause of action. The appellant seeks to have the decision of 30 March 2016 quashed and the proceeding WS No 456 of 2015 reinstated and listed before another Judge of the National Court. 

2.   At some point the State was joined as the third respondent to the appeal. The State has filed an amended notice of motion in relation to consent orders agreed between the appellant and the first and second respondents. The State seeks to have those orders vacated.
background

3.   The appellant is from Central Province and is a leader of the Moroka/Hagari Clan of Eradabuna Village, which is along the Kokoda Track. 

4.     In approximately 2003, Tasgold Limited was granted a Mining Exploration Licence (the Licence). The Licence permitted Tasgold to undertake mining exploration activities along the Kokoda Track–Mt Bini area, which is located within the Koiari LLG area of the Central Province. Sometime in 2004, Tasgold ceased to carry out the exploration activities in the area and sold the Licence to Frontier Resources Limited, who carried out exploration activities until 2012. 

5. The first respondent is the Chairman of the second respondent, which was established and incorporated in 2011 to represent the landowners who were affected by exploration activities along the Kokoda Track. 

6.  Concerns were raised by various parties about the potential environmental damage to the Kokoda Track perpetuated by the exploration activities, and the effect of such activities on the historical significance of the Kokoda Track. As a result, the Kokoda Track Landowners Memorandum of Agreement (the MOA) was entered into by the State in conjunction with Kokoda Track landowners and the various stakeholders involved in the exploration activities. 

7.   The MOA was based on a public policy agreement between the Government of Papua New Guinea and the Australian Government. The aim of the MOA was to prevent further environmental damage to the Kokoda Track and to compensate the landowners for damage already done, as well as the loss of opportunity to participate in business activities which would have arisen from mining and exploration activities in the area. The Licence was also terminated by the MOA. 

8.    After the termination of the Licence, landowners submitted claims to the State through the Department of Treasury and Finance. In approximately August 2013, the State paid the second respondent a sum of K5 Million, which was to be the first of four instalments, payable annually, as compensation to landowners. 

9.     The appellant alleged that the former Chairman of the second respondent failed to distribute the 2013 payment in accordance with the MOA. The appellant approached the former Chairman of the second respondent in November 2013, and the former Chairman offered to pay two instalments each of K60,000. The first of those instalments was paid in November 2013, but the appellant alleged that the second instalment, due the following month, remained outstanding. As a result, the appellant commenced proceedings in the National Court, being WS 152 of 2014, to recover the outstanding K60,000. 
10.   On 19 March 2014, the parties entered into a Deed of Settlement and Release (DOSR) on the understanding that the earlier proceedings would be discontinued and settled by the payment of the outstanding instalment. The DOSR also provided that the second respondent would pay to the appellant 25 per cent of the three remaining K5Million instalments for the years 2014, 2015 and 2016. 
11.     The material, operative clauses of the DOSR, which appear at Annexure D to the affidavit of Kein Wanire dated 4 June 2015 (AB at 98) are as follows:
RECITALS:
A.	The Releasor and the First and Second Releasees (the “Releasees”) are involved in a National Court proceedings WS NO.152 of 2014: KEIN WANIRE in his capacity as the clan leader of Moroka/Hagari and on behalf of 3 other clans of Erudabuna Village namely; Aihai, Bereka and Awai Clans in Kairuku Hiri Electorate, Central Province –vs- Barney Jack and Kodu Resources Owners Association (the “Proceedings”)
B.	The parties have agreed to discontinue the Proceedings.
C.	The Releasor has agreed to release the Releasees from claim in the Proceedings and in accordance with the provision of this Deed.
D.	The Releasor and the Releasees agree that the agreement in this Deed shall not be regarded as completed or signed and the Releasor shall not execute the Deed unless:
(i)	The Releasees produce on the date of settlement, a bank cheque for the agreed sum payable to the Releasor; and
(ii)	The Releasor produced on the date of settlement, a consent Notice of Discontinuance of the Proceedings duly signed by the Releasor.
(iii)	A total of the K15million in outstanding balance is still owed by the State. It is an arrangement between the State and the Releasees that K5million shall be paid each year for the next three (3) years until the total of K15million is settled. 25% of every K5million paid by the State to the Releasees every year for the next three (3) years shall be paid to the Releasors herein.  
(emphasis in original)
12.    The appellant commenced the proceedings the subject of this appeal in the National Court by writ of summons and statement of claim filed on 17 April 2015. The proceedings purported to be of a representative nature, as the appellant acted in his capacity as a leader of the Moroka/Hagari Clan of Eradabuna Village. The appellant sought to recover the outstanding amount which was pleaded in the statement of claim as follows:
22. The former Chairman in distributing the 2nd instalment payment of K5Million deliberately dishonoured the Deed by paying the Plaintiff only K350,000 of the monies that were clearly agreed to and stipulated in the Deed as follows:
(a) Outstanding balance of the 1st Instalment Payment: K 	   60,000.00
(b) 25% of the 2nd K5Million Instalment Payment for 2014:K          1,250.00.00
	TOTAL:					K        1,310,000.00
	LESS PAID:					K           350,000.00
TOTAL AMOUNT DUE PAYABLE:		K           960,000.00
23. Despite numerous demands made by the Plaintiff to the Second Defendant to have the K960,000.00 outstanding payment settled, the Second Defendant had failed, neglected and/or ignored to settle the said payment.  
24. AND THE PLAINTIFF THEREFORE CLAIMS:
(a) Judgment in the sum of K960,000.00
(b) Interest @ 8% per annum.
(c) Costs.
(d) Other orders the Court deems fit. 
the decision of the national court
13.    The first and second respondents filed a notice of motion on 10 September 2015 seeking to: 
•	dismiss the proceedings for failure to comply with Order 5 Rule 3(1)(a) and (b) of the National Court Rules; 
•	dismiss the proceedings for failure to comply with Order 4 Rule 30(1)(a) of the National Court Rules;
•	dismiss the proceeding for disclosing no reasonable cause of action, being frivolous and vexatious and being an abuse of the process of the Court, pursuant to Order 12 Rule 40(1)(a),(b) and (c) of the National Court Rules; 
•	strike out the whole or part of the pleadings in the statement of claim pursuant to Order 8 Rule 27(1)(a) and (c) of the National Court Rules for disclosing no reasonable cause of action and being an abuse of the process of the Court;
•	vary the orders of the National Court of 19 June 2015 pursuant to Order 12 Rule 8(3)(a) and (4) of the National Court Rules. 
14.     The appellant additionally filed a notice of motion on 14 September 2015 seeking:
•	to amend his writ of summons pursuant to Order 12 Rule 1 and Order 8 Rule 50(1) of the National Court Rules; and
•	an order that summary judgment to be entered pursuant to Order 12 Rule 38 of the National Court Rules. 
15.  The primary Judge granted leave for the appellant to amend his writ of summons, which would allow the appellant to properly plead his representative capacity. 
16.  However, in relation to the orders sought by the first and second respondents, the primary Judge agreed that there were further defects in the appellant’s pleadings. The primary Judge identified the following specific issues with the appellant’s statement of claim:
•	The appellant did not plead that he was a landowner and that his village was affected by the exploration activities (paragraphs 37 and 39). 
•	The appellant failed to plead that he and his village were stakeholders involved in the exploration activities (paragraph 39). 
•	The appellant did not plead which clause of the MOA included his village as being affected by the exploration activities and also failed to plead that his village was a party to the MOA (paragraph 40).
•	The appellant did not plead his right to claim his share in the K5 million (paragraph 40). 
17.     At paragraphs 34 and 36 the primary Judge granted leave for the appellant to amend the statement of claim so that issues of the appellant’s representative capacity were properly pleaded. However, the primary Judge did not permit any further amendments and, in any event, the appellants did not move any additional amendments. Concerning the substantive aspects of the statement of claim, the primary Judge held that “… it [was] so difficult to tell or establish the bases of Plaintiff’s claim as the pleadings are so bad that specific clauses of the MOA have not been pleaded.” The primary Judge further stated at [41]:
Given the circumstances described above, I am left in doubt as to the basis of the [appellant’s] claim. Applying the principles in PNG Forest Prodcut case (supra), Nui case (supra) and Kiee Tapp case (supra) that if the statement of claim is so ambiguous or lacking in particularity that it does not facilitate orderly and rational pleadings, which would enable the real issues to be identified it should be struck out and/or if the statement of claim just leaves a defendant guessing as to what the plaintiff’s allegations are, it should be struck out.
(Emphasis and errors in original.)
18.     On this basis, the primary Judge struck out the statement of claim and dismissed the proceeding under Order 12 Rule 40(1) National Court Rules. In the circumstances the primary Judge found that it was unnecessary to consider the additional orders sought by the appellant and the first and second respondents. 
the grounds of appeal
19.      In the notice of appeal filed on 9 May 2016, the appellant relies on the following grounds of appeal:
(a)	The Learned Judge erred in law by finding that there was no cause of action pleaded, when the Writ of Summons (filed on 17 April 2015 pleaded a cause of action.
(b)	The Learned Judge erred in law dismissing the proceedings summarily and or making substantive findings on the pleadings on an interlocutory application when:
(i)	pursuant to case authority of PNG Forest Products Pty Ltd v the State [1992] PNGLR 85, the Learned Judge was simply required to consider from the quick perusal of the Statement of Claim whether there was a cause of action pleaded;
(ii)	pursuant to cause authority of PNG Forest Products Pty Ltd v the State the pleadings in the Writ of Summons (filed on 17 April 2015) were not obviously and incontestably bad;
(iii)	the defects (if any) in the pleadings of the Writ of Summons could have been corrected or cured by an order for appropriate amendments of pleadings. Instead of a dismissal of proceedings pursuant to the principles established in PNG Forest Product Pty Ltd v The State (above) and Republic of Peru v Reuvian Guano Company (1887) 36 Ch D 489.
(c)	The Learned Judge erred in law in dismissing the matter when pursuant to authority of Michael Kuman of Michael Kuman & Ors v Digicel (PNG) Ltd [2013] SC 1232:
(i)	he was not required to be satisfied that every element of the cause of action was pleaded;
(ii)	he was required to consider whether the statement of claim as a whole sufficiently disclosed a cause of action;
(iii)	he failed to consider the Statement of Claim as a whole, which had he done so would have disclosed sufficiently a cause of action.
20.     As we noted earlier in this judgment, proceedings filed on 9 May 2016 were consolidated with those filed on 11 April 2016. The earlier notice of appeal raises what are in substance similar issues to the notice of appeal filed on 9 May 2017, but have been further particularised. All parties appear to have proceeded on the assumption that the later-filed notice of appeal is that which is primarily relied upon by the appellant. 
Relevant law
21.     Order 12 Rule 40 of the National Court Rules provides:
(1)	Where in any proceeding it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings – 
(a)	no reasonable cause of action is disclosed; or
(b)	the proceedings are frivolous or vexatious; or
(c)	 the proceedings are an abuse of the process of the Court. 
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings. 
(2)	The Court may receive evidence on the hearing of an application for an order under Sub-rule (1).
22.      In PNG Forest Products Pty Ltd and Inchape Berhad v The Independent State of Papua New Guinea and Jack Genia, The Minister for Forests [1992] PNGLR 85 (PNG Forest Products), the National Court considered a motion to strike out a claim on the basis that it disclosed no reasonable cause of action or was an abuse of court process. Sheehan J made the following statements:
The protection of law guaranteed by the Constitution and law of Papua New Guinea, carry with them the right for persons to present petitions and actions before the court of this country for the protection of rights and resolution of disputes with others. In short, a party has the right to have his case heard. Those rights cannot be lightly set aside. 
The Rules of Court in particular the Rules of the National Court are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the court. For the same reason, and in the interest of justice, the rules include prohibitions against the abuse of the court process. 
… 
Quite apart from [Order 12 Rule 40], the court also has an inherent jurisdiction to protect itself from abuse of process. Thus, if the court is satisfied that the conditions of this rule have been satisfied, it may strike out that offending action. It can in appropriate cases, therefore, prevent a party from presenting its case in court or from defending one brought against it. But the refusal to try a party’s claim or the striking out of its defence is not lightly done,…
(Emphasis added.)
23.     That courts should be hesitant to strike out a proceeding, and prevent a plaintiff from being heard by the Court, is a longstanding principle. In Republic of Peru v Peruvian Guano Company (1887) 36 Ch D 489, Chitty J said:
… if, notwithstanding defects in the pleading,… the Court is of the view that a substantial case is presented the Court should, I think, decline to strike out that pleading: but when the pleading discloses a cause which the Court is satisfied will not success, then it should strike it out and put a summary end to the litigation. 
24.      Additionally, in Nagle v Feilden [1996] 1 All ER 689, Salmon LJ said    :
It is well settled that a statement of claim should not be struck out and the plaintiff driven from the judgment seat unless the cause is unarguable.”
25.     In Dyson v Attorney-General [1911] 1 KB 410, Fletcher Mouton LJ indicated that the summary dismissal procedures should be confined to cases where the cause of actions is “obviously and almost incontestably bad”. 
26.     In Takori v Yagari (2008) SC 905 (Takori v Yagari), the meaning of “cause of action” was discussed, and the Supreme Court approved the statement made by the National Court in Kerry Lero trading as Hulu Hara Investments Ltd v Philip Stagg (2006) N3950. The Court said at [12]:
With regard to the issue of disclosing a reasonable cause of action or defence, the Court must be clear that, there are two parts to the phrase ‘cause of action’: First, it entails a right given by law such as an entitlement to reasonable damages for breach of human rights under s. 58 of the Constitution, commonly referred to as, ‘the form of action’. Secondly, it entails the pleadings disclosing all the necessary facts which give rise to the form of the action. 
27.      Similar comments in relation to what will meet the requirements for disclosing a reasonable cause of action were made in Kiee Toap v the State (2004) N2731 (Kiee Toap) by Cannings J:
Whenever a plaintiff brings a case to court, the originating document – in the present case, the writ of summons and statement of claim – must demonstrate that the plaintiff has a ‘cause of action’. The document must clearly set out:
•	the legal ingredients or the elements of the claim; and
•	the facts that support each element of the claim.
The plaintiff does not have to say what evidence there is of the facts being alleged. In fact, the National Court Rules prohibit that. But the plaintiff must outline the claim and demonstrate that it has a clear legal basis. If the plaintiff’s originating document does that, there is a reasonable cause of action. If no, it does not disclose a reasonable cause of action. 
28.    The requirement to disclose a cause of action has been distinguished from circumstances where there is a complaint about the sufficiency of particulars of pleadings. In Takori v Yagari, it was said:
Going to the arguments of the State, it is clear that, the attack on the appellants’ statement of claim is really on the insufficiency of pleadings more than a total failure to disclose a reasonable cause of action. There is provision in the Rules in particular O 8 r 36, r 50 and r 51 to take care of and remedy these kinds of problems. It is not only a good practice but also fair and equitable for a defendant faced with such a bad pleading as might have been the case here, to request for further and better particulars from the party responsible for such poor pleadings or to amend the pleadings and plead with clarity and with all of the appropriate particulars. When such a request is not appropriately responded to or ignored, the party making the request would be entitled to apply to the Court for appropriate orders including remedial orders for any failure to comply with any such orders, at the cost of the defaulting party. 
29.     With respect to fulfilling the requirement of disclosing a reasonable cause of action, it has been established that not every element must be expressly pleaded. In Michael Kuman for and on behalf of himself and 158 claim member of the Aura Gunua Clan v Digicel (PNG) Limited (2013) SC1232 (Kuman v Digicel), the Supreme Court held:
First, though desirable, it is not essential that every element of every cause of action be expressly pleaded in a statement of claim. What is essential is that the statement of claim read as a whole discloses a cause of action in sufficiently clear terms to put the defendant on notice as to the claim that it has to meet. Here, the failure of the appellant to unequivocally and specifically claim that the respondent owed them a duty of care does not mean that the statement of claim fails to disclose a cause of action in negligence, as the allegation of a duty of care is sufficiently apparent from the whole of the statement of claim… 
30.     The purpose of pleadings is to identify what are the real issues in dispute between the parties to the proceeding. The appellant is not required to substantiate all of their claims in pleadings – that is a matter for evidence and closing submissions. 
The parties’ submissions
31.     The appellant essentially submits:
•	The source of the cause of action pleaded in the statement of claim was the DOSR – that is, the appellant claims that he has a right pursuant to the law of contract. The basis of the contractual right was pleaded, so a reasonable cause of action was disclosed. 
•	The settled principles concerning Order 12 Rule 40 set a high threshold to be met in order to strike out a writ of summons. Namely, the authorities require that the cause of action is “obviously and almost incontestably bad”, “cannot be cured by amendment” or is “unarguable”. 
•	Insofar as the terms of the MOA may be relevant to the contractual entitlement under the DOSR, it is not essential that every element of every cause of action is expressly pleaded: Kuman v Digicel (PNG) Ltd (2013) SC1232. The appellant had pleaded the essential ingredients of his claim.
•	The Court should not readily dismiss a claim because of lack of particulars, which can be cured by appropriate amendments. If the primary Judge had concerns that the relevant clauses of the MOA had not been pleaded, the primary Judge should have ordered that the appellant provide particulars or amend their statement of claim.
32.     The first and second respondents submit that the National Court correctly found that the appellant failed to properly plead particulars of the MOA such that he would be entitled to the socio-economic benefits as a landowner under the MOA. In summary, the first and second respondent submitted as follows:
•	The statement of claim failed to disclose the relevant agreement pursuant to which, as the appellant was a party to the MOA, while the first and second respondents were beneficiaries under a different Memorandum of Agreement between the Independent State of Papua New Guinea and the Naoro and Mt Kodu Landowners. 
•	The statement of claim did not disclose the appellant’s entitlement to claim under any of the memoranda of agreement, because he was a landowner of a village within the exploration area or because his village was affected by exploration activities. 
•	Even in the event that the appellant was a landowner of a relevant village, the statement of claim nonetheless did not disclose the appellant’s entitlement to sue the first and second respondents for failing to pay to him socio-economic grants under either memorandum of agreement, nor whether the appellant was entitled to sue the respondents under the DOSR.  
33.     The submissions of the State largely echoed those of the first and second respondents, including the following:
•	The statement of claim did not plead a right given by law. The statement of claim purported to claim 25% of the funds under the MOA but the MOA did not give them the right to claim. The MOA was precisely specified for the Naoro and Mt Kodu part of the Kokoda track only. 
•	The MOA was based only on a policy initiative between the Government of Papua New Guinea and the Australian Government, and not on enabling legislation that gave the appellant certain rights that could be enforced.  
•	The appellant cannot rely on Kuman v Digicel because that case is distinguishable, on the basis that it concerned a breach of constitutional rights as a result of negligence, and in general negligence cases it is not possible to plead every particular in detail. In any event, the appellant’s reliance on Kuman v Digicel is misguided as it is still necessary for the statement of claim, when read as a whole, to disclose a cause of action. The appellant’s statement of claim did not do so.  
•	The appellant cannot rely on PNG Forest Products in order to say that the primary Judge should not have dismissed the proceeding, but should have allowed any defects in the statement of claim to be cured by appropriate amendments. This is because the appellant never sought to amend his cause of action other than in relation to the representative capacity of the appellant. The National Court did not consider amendments to cure the additional defects in the statement of claim because the appellant did not invite the National Court to do so. 
•	Alternatively, the appellant could not have improved his statement of claim by amendments because the appellant had, in any case, failed to plead a right given by law to claim payment and the DOSR relied on was mischievous and based on coercion. 
34.     Additionally, in written submissions, the first and second respondents, and the State, made comments regarding the conduct of the appellants in entering into the DOSR, including that their conduct was contrary to the purposes of the MOA and that the appellants had made threats in order to bring about their entitlement to a portion of State funds paid to the second respondent. The State referred to the affidavit of Chillion Billoi filed on 10 September 2015, in which allegations of fraud, coercion, assault and threats were made in order to force the outcome of the DOSR. 
Consideration
35.      It is evident that the primary issue in the appeal is whether, in the absence of pleadings regarding the specific clauses of the MOA that gave rise to the entitlement of the appellant to the funds payable in accordance with the MOA, a reasonable cause of action could be disclosed by the statement of claim. 
36.      Focusing on this issue, however, misconceives the nature of the cause of action found in the appellant’s statement of claim. While the appellant’s earlier claims in National Court proceedings WS 152 of 2014 were grounded on an entitlement pursuant to the MOA, the proceeding the subject of this appeal (WS 456 of 2015) does not concern a right given by the MOA. The appellant seeks only to enforce the provisions of the DOSR. To the extent that the circumstances relating to the MOA and the formation of the DOSR may affect the validity of the DOSR and the appellant’s right to payment pursuant to it, those issues should be heard and determined at trial in the National Court. 
37.      In this regard we make the following observations.
38.      When read as a whole, the amended statement of claim discloses a cause of action, being a breach of the contractual rights under the DOSR, which is quite separate from the issue of whether the appellant has any entitlement under the MOA: see PNG Forest Products; Kuman v Digicel.
39.      At paragraph 12 of the amended statement of claim the appellant pleads that the State, in conjunction with the Kokoda Track landowners and all the stakeholders involved in the exploration activities entered into the MOA, as a result of which the relevant licence terminated. At paragraph 13 the appellant pleads the core aspects of the MOA, being to prevent further environmental damage and to fairly compensate the landowners affected for both damage already incurred as well as the loss of opportunity to participate in mining activities. However the essence of the appellant’s claim, as found in particular at paragraphs 20-25 of the amended statement of claim, concerns rights under the DOSR, not the MOA. These paragraphs read :
20.	By way of a Deed of Settlement entered into on 19th March 2014 by the former Chairman in his capacity as the Chairman of the Second Defendant and the First Plaintiff herein (“the Deed”), the First Plaintiff’s said legal suit referred to as WS No. 153 of 2014 (“the previous proceedings”) was settled out of court with an understanding that the payments stipulated in the Deed be settled upon receiving the 2nd instalment payment for 2014.
21.	Apart from the outstanding K60,000 balance which was the subject of the previous proceedings, it was also stipulated as a term in the Deed that the Second Defendant pay to the First Plaintiff 25% of the remaining three K5Million annual instalment payments for 2014, 2015 and 2016 which was quoted as
 “D(ii)	A total of the K15Million in outstanding balance is still owed by the State. It is an arrangement between the State and the Releasees that K5Million shall be paid each year for the next three (3) years until the total of K15Million is settled. 25% of every K5Million paid by the State to the Releasees every year for the next three (3) years shall be paid to the Releasor herein.”
22.	In or about the end of December 2014, the 2nd K5Million instalment payment for 2014 was paid by the State to the Second Defendant and in like manner, the former Chairman in his capacity as the Chairman of the Second Defendant collected the payment from the Department of Finance.
23.	The former Chairman in distributing the 2nd instalment payment of K5Million deliberately dishonoured the Deed by paying the Plaintiff only K350,000.00 of the monies that were clearly agreed to and stipulated in the Deed as follows:
(a) Outstanding balance of the 1st Instalment Payment: K 	   60,000.00
(b) 25% of the 2nd K5Million Instalment Payment for 2014:K          1,250.00.00
	TOTAL:				K        1,310,000.00
	LESS PAID:				K           350,000.00
TOTAL AMOUNT DUE PAYABLE:	K           960,000.00
24.	Despite numerous demands made by the Plaintiff to the Second Defendant to have the K960,000.00 outstanding payment settled, the Second Defendant had failed, neglected and/or ignored to settle the said payment.  
25. AND THE PLAINTIFF THEREFORE CLAIMS:
(a) Judgment in the sum of K960,000.00
(b) Interest @ 8% per annum.
(c) Any interim reliefs that may do justice in the circumstances
(d) Costs
(e) Other orders the Court deems fit.
40.     As the right alleged by the appellant concerns the contractual rights under the DOSR, the appellant has pleaded the “essential ingredients” of their claim: Kiee Toap; Takori v Yagari. This case disclosed by the statement of claim is not “unarguable” nor “obviously and almost incontestably bad”: Nagle v Feilden; Dyson v Attorney-General. 
41.     We also consider that the complaints of the respondents regarding the statement of claim are more in the nature of complaints relating to a lack of particulars, rather than a total failure to disclose an arguable case: Takori v Yagari. 
42.      In light of these observations, and in keeping with the strong statements from the authorities including PNG Forest Products, the National Court proceeding should not have been struck out pursuant to Order 12 Rule 40.
43.      Further, and importantly, issues raised by the appellant in relation to the DOSR and foreshadowed by the respondents drawing in issues connected with the MOA – including alleged fraud and threats – can properly be the subject of a trial in the National Court: PNG Forest Products; Takori v Yagari. They do not, of themselves, warrant a finding that no reasonable cause of action was pleaded in the circumstances of this case. 
44.      Indeed, assertions of the respondents that the appellant made threats and otherwise coerced the first and second respondents to secure the DOSR are not strictly relevant to this appeal. The rights on which the appellants relied in bringing their claim in the National Court were sourced in contract, namely the DOSR. As submitted by the State, it may be that there are questions as to whether the DOSR itself ought to be vitiated or is otherwise contrary to the MOA. Potentially, these issues could properly be canvassed in the respective defences. Evidence and submissions concerning those issues ought to be considered at trial in the National Court. The adequacy of the statement of claim – as a pleading – and whether or not it discloses a cause of action that can be determined at trial in the National Court is not, at this stage, dependent on issues that attack the formation of the contractual right asserted by the appellants in their pleading. 
45.      In summary, the right the appellant has asserted in the statement of claim is grounded in contract. The essential elements of the contractual claim pursuant to the DOSR can be ascertained from the appellant’s pleading.This was not an appropriate case for dismissal under Order 12 Rule 40, as the statement of claim has disclosed a reasonable cause of action. The decision of the National Court should be quashed and the proceeding reinstated. 
the State’s amended notice of motion
46.     On 15 November 2017, the State filed an amended notice of motion to discharge consent orders made ex parte by a Registrar of the Supreme Court on 23 August 2016. The State submits that those orders were an abuse of process. 

47.      The relevant consent orders were made in the following terms:
1.	The appeal SCA No.41 of 2016 is consolidated with the Appeal herein. 
2.	The Department of Treasury and or Finance must pay forthwith the sum of K6,500,000.00 and any other monies lawfully available, owing and due to the Kodu Resources Owners Association Inc. as socio-economic grants to Nidue & Associates Lawyers to be held on behalf of the Kodu Resources Owners Association Inc.
3.	The Department of Treasure and or Finance must pay forthwith the sum of K3,500,000.00 from monies lawfully available, owing and due to the Kodu Resources Owners Association Inc. as socio-economic grants into the National & Supreme Court Trust Account to be held pending determination of this Appeal and thereafter subject to disbursement in accordance with this Court’s directions. 
4.	Parties are at liberty to apply to vary these Orders upon 3 days notice. 
5.	No order as to Costs. 
6.	Time for entry of these Orders be abridged to the time of settlement which shall take place forthwith.
7.	The Appellant to file Undertaking As to Damages 7 days from today and have the same delivered to the Respondents. 
48.   No party challenges Orders 1, 4, 5, 6 and 7 of those orders. The issue identified by the State in the context of this appeal concerns Orders 2 and 3 which compel the Department of Treasury and Finance to perform certain acts, notwithstanding that, at the time the orders were agreed and entered into by the appellant and the first and second respondents, the State had not been joined as a party and did not consent to the orders. 
49.     At the hearing, counsel for the appellant explained that Orders 2 and 3 were intended to have the same effect as a restraining order, which the appellant had sought, preventing relevant funds from being distributed pending the outcome of these proceedings, in order to protect the appellant’s position. Counsel for the appellant submitted that there had been orders in place in the National Court to a similar effect, being:
1.	The State through the Department of Finance is restrained from making any payments of the yearly instalment payments of K5 million each year for the years 2015 and 2016 totalling K10 million to Kodu Resource Owners Association pending the determination of the herein proceedings or until further orders of the Court. 
2.	All payments to Kodu Resource Owners Association is stayed pending the determination of the herein proceedings or until further orders of the Court. 
3.	The First Defendant and any agent or servant of the Defendant are restrained from intimidating, threatening or harassing the Plaintiff and any other clan members of the Erudabuna Village for the reasons related to and connected to the herein proceedings.
4.	The matter is returnable on 6th July 2015 at 9:30 am. 
50.      In our view, Orders 2 and 3 of the ex parte consent orders dated 23 August 2016 requiring that the State make payments into the trust account of the lawyers for first and second respondent were an abuse of process, especially in circumstances where the State was not a party to the proceedings. 
51.      The orders were similar in nature to garnishee orders. Importantly, neither the Supreme Court Act 1975 nor the Supreme Court Rules 2012 make provision for garnishee proceedings or making garnishee orders of this nature. Such proceedings can be brought in the National Court under Order 13 Division 7 of the National Court Rules. However, the ex parte consent orders in this case would not have met the requirements of Order 13 Division 7 even if those rules applied because:
•	The appellant, the first respondent and the second respondent are not “judgment creditors”, and the State is not a “judgment debtor”, as defined in Order 13 Rule 53 of the National Court Rules.
•	No garnishee notice was ever served on the State prior to the appellant and the first and second respondents obtaining the consent orders. 
•	In any event, the Court could not be satisfied that the requirements of Order 13 Rule 56 had been complied with, as there was no relevant debt accruing from the State to any of the other parties. As has been discussed previously, the payments made to the second respondent under the MOA were in relation to a “policy scheme”, and were not required by legislation or other laws, and as such cannot be properly characterised as a “debt”. 
52.      No jurisdictional foundation for the Court to make Orders 2 and 3 has been identified. Although it is arguable that the Supreme Court would nonetheless have power to make orders under s 155(4) of the Constitution, for the reasons we have explained we are minded to make an order pursuant to s5(3) of the Supreme Court Act 1975 discharging the consent orders of 23 August 2016. 
conclusion
53.     The appeal should be allowed and the appellant should have the opportunity to have his pleaded case heard in the National Court. Accordingly, the orders of the primary Judge should be set aside and the proceeding reinstated.
54.     In relation to the issue raised by the State’s amended notice of motion, we will order that the consent orders of 23 August 2016 be discharged in accordance with s 5(3) of the Supreme Court Act 1975.
55.      We note that the effect of setting aside the orders of the primary Judge also reverses the discharge of the restraining orders in the National Court, such that those orders are effectively reinstated along with the National Court proceeding. We consider it is appropriate that these orders remain in place pending the outcome of the proceedings in the National Court, to preserve the interests of the parties. For the avoidance of doubt, we therefore consider it appropriate to make a further order that the orders of the National Court dated 19 June 2015 in proceeding WS 456 of 2015 be affirmed. 
56.      On the issue of costs, there is no reason in this case why the appellant should not be entitled to have his costs of and incidental to the appeal paid by the first and second respondents. We note that the State was not a party to the motion to strike-out the statement of claim in the National Court proceedings, and was joined to the appeal following the consent orders made by a Registrar of the Supreme Court. In this light we do not consider that the State should be ordered to pay the appellant’s costs of and incidental to the appeal.
57.     In relation to the amended notice of motion of the State to discharge the consent orders made by a Registrar of this Court, it is appropriate that the costs of the State of and incidental to that notice of motion be borne equally by the appellant and the first and second respondents on a party‑party basis. 

THE COURT ORDERS THAT:
1.	The appeal be allowed. 
2.	The orders of the National Court in proceeding no. WS 456 of 2015 dated 30 March 2016 be set aside. 
3.	For the avoidance of doubt, Orders 1, 2 and 3 of the National Court dated 19 June 2015 in proceeding WS 456 of 2015 be affirmed.
4.	Orders 2 and 3 of the consent orders of the Supreme Court dated 23 August 2016 in proceeding SCA 57 of 2016 be discharged.
5.	The first and second respondent pay the costs of the appellant of and incidental to the appeal on a party-party basis, to be taxed if not otherwise agreed. 
6.	The appellant and the first and second respondents pay the costs of the third respondent of and incidental to the motion 8 November 2017 on a party-party basis, to be taxed if not otherwise agreed. 
________________________________________________________________
Kopunye Lawyers: Lawyers for the Appellant
Twivey Lawyers: Lawyers for the Third Respondent