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Kapal v Perdacher [1994] PGNC 57; N1249 (22 July 1994)

N1249

PAPUA NEW GUINEA
[In the National Court of Justice]

OS.129 of 1994

PHILIP KAPAL
for and on behalf of the Plantation Coffee Growers of PNG
Plaintiff

V

WALLY PERDACHER
First Defendant

ROY EVARA
Minister for Agriculture and Livestock
Second Defendant

PETER KEWA
Chairman of the Coffee Industry Corporation
Third Defendant

Mt Hagen: Woods, J
8, 22 July 1994

Practice and Procedure - Declaratory relief - locus standi - sufficient interest - not a member of the Corporation - no interest.

Cases cited:
Donigi v The State [1991] PNGLR 376
Re Petition of M. T. Somare [1981] PNGLR 265

P. Kunai for the Plaintiff.
D. L. O'Connor for the First Defendant.
C. R. Hudson for the 2nd and 3rd Defendants.

8 July 1994

WOODS, J.: The Plaintiff has commenced these proceedings claiming to be acting for and on behalf of the smallholder coffee growers and Plantation Coffee growers in Papua New Guinea and is seeking a declaration that the appointment of the First Defendant as a Director of the Coffee Industry Corporation by the Second Defendant be declared null and void as it contravenes the provisions of the Coffee Industry Corporation (Statutory Functions and Powers) Act of 1991 and the Memorandum and Articles of the Corporation.

The Defendants have applied to the Court that the proceedings be dismissed and that the originating summons be struck out.

The main point raised in this application is that as the plaintiff is not prescribed in the Articles of Association of the Corporation as a member and in no other way can be said to be a member he has no right or standing to challenge any appointments that may be made in the Corporation. The plaintiff seems to be bringing a representative action involving a corporation in which he has no status.

The Coffee Industry Corporation was set up as a corporation in accordance with the Companies Act by way of a Memorandum and Articles of Association subscribed to in September 1991. It has further powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act 1991.

The membership of the Corporation is set out in Article 5 of the Articles of Association and appears to be expressed to cover all persons or bodies that may be interested in the coffee industry. Thus the membership comprises firstly Grower Associations which are representative of smallholder coffee growers by regions throughout the country. Then there are, a Coffee exporter Association, a Plantation Processor Association, a Block Development Association, and then various National Departmental Heads.

All the different Associations are to be properly incorporated. This careful detailing of the membership would seem to be to ensure a practical and manageable representation of the many people who may be concerned in the growing and processing and marketing of coffee. The argument presented to this court is that the plaintiff does not come within any of the memberships provided for, thus he is not a member of one of the regional associations nor any of the other associations. He suggests that he is acting for and on behalf of the smallholder growers and Plantation Coffee growers in PNG however surely all the smallholder growers and plantation growers who are really interested in the operation of the corporation would be members of the regional associations or other associations and could and should take any complaints to the corporation through that membership. The plaintiff should be pressing his complaints through his member regional association.

By not being a member of a regional association or Plantation Association how can he claim to be genuinely interested in the operation and running of the Corporation.

The matter that the Plaintiff is complaining about is the appointment by the Minister of a Director to the Board of Directors of the Corporation. Whilst this may appear initially to be a matter of Public Law a perusal of the Act shows that appointments to the Board start with the Corporation and not with the Minister.*

The Act Part 111.

Section 5 - Appointment of Directors of the Coffee Industry Corporation.

1. The Coffee Industry Corporation shall recommend to the Minister its nominees to the Board of the Corporation which number of nominees recommended shall exceed the number of vacancies on the Board.
   
2. The Minister shall approve the appointment of such of those nominees as he considers most suitable unless the appointment is -
   

(a) in breach of the provision of the Memorandum and Articles of Association of the Coffee Industry Corporation; or

(b) in conflict with the interests of the members of the coffee industry.

So what standing can the plaintiff have to challenge such internal decisions of the Corporation for recommendation for appointments to the Board. This would be different from other cases which have come before the Courts. For example in SCA No 4 of 1980 re Petition of M T Somare [1981] PNGLR 265 the Supreme Court said that it was not possible to lay down a workable definition for all cases because each case is different, however it then found that the plaintiff as a member of Parliament belongs to the governmental body which has been invested with the power of law-making by the Constitution and he had raised a point that the law-making body had not complied with certain provisions of the Constitution in passing the Defence Force (Presence Abroad) Act.

That case can be contrasted with the case Donigi v The State [1991] 376 where the National Court found that the plaintiff's claim was hypothetical and not founded on property rights actually affected and that the plaintiff's interest as a citizen, landowner and President of the Law Society were objectively not sufficient to found the particular claim.

The above two cases cover some of the principles of representative actions but in the end each case is different and at the end of the day the question is asked what are the plaintiff's interests. In the Somare case the plaintiff was a member of the law-making body responsible for the matter complained off and he had already made his complaint known at the start. However in the Donigi case he was far too remote and was claiming to represent such a wide ranging indeterminate class.

In the case before me now the plaintiff has not even shown enough interest to affiliate himself with one of the representative bodies for whom the Corporation was formed. The representative bodies were created to enable him to join other parties who have an interest in the industry and through the appropriate means under the Companies Act make his views know.

Whilst the plaintiff may say that the activities of the Corporation have a public nature by virtue of the fact that it has been given powers and functions under the Coffee Industry Corporation (Statutory Functions and Powers) Act and such powers and functions can infringe on the financial livelihood and operation of coffee growers, the Act clearly allows the Corporation to carry on its business without prejudice:

See Sect. 4: Status of Coffee Industry Corporation.

(1) The Coffee Industry Corporation -

(a) is not the State and does not represent the State except by express agreement; and

(b) except as provided by this Act, is not exempt from any rate, tax, duty or other impost imposed by or under any law; and

(c) cannot render the State liable for any debts, liabilities or obligations,

unless this Act or any other law expressly so provides.

(2) Nothing in this Act shall prejudice the powers of the Coffee Industry Corporation to alter its Memorandum and Articles of Association or to dispose of, or deal with, its assets or to carry on or discontinue any part of its business, but any alteration to its Memorandum and Articles of Association shall be consistent with the paramount interest of the coffee industry.

Before the Plaintiff can complain about the internal management and appointments of the Corporation he must show his genuine interest and become an interested member by joining one of the regional associations, an avenue which has always been open to him.

I find that the Plaintiff has no standing or status to challenge the internal decisions or recommendations of the Corporation and I therefore dismiss the proceedings and strike out the Originating Summons.

Lawyer for the Plaintiff: P. Kunai
Lawyer for the First Defendant: D. L. O'Connor
Lawyer for the 2nd and 3rd Defendants: Gadens Ridgeway