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Kapinias v O & G Niugini Ltd [2018] PGNC 346; N7486 (28 September 2018)

N7486

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 534 OF 2018

BETWEEN:
ANDY KAPINIAS
Ward Member of Lamarainam, Inland Baining Local Level Government, Gazelle District
Plaintiff

AND:
O & G NIUGINI LIMITED
First Defendant

AND:
LAMUS INCORPORATED LAND GROUP
Second Defendant

Kokopo: Anis J
2018: 10 & 28 September

MOTION – Application for summary judgment – Order 12 Rule 38(1) – National Court Rules

PRACTICE & PROCEDURE – primary right – whether the plaintiff has disclosed his primary right(s) in the matter

PRACTICE & PROCEDURE - capacity of the plaintiff – whether the plaintiff has sufficient authority to commence the proceedings – evidence of his authority to sue as a ward member

Facts

The plaintiff applied for summary judgment. He claimed that the 1^st defendant was a foreign company and that pursuant to the provisions of the Investment Promotion Authority Act 1992, the 1^st defendant was not supposed to conduct business dealings in Papua New Guinea. The plaintiff alleged that the 1^st defendant breached the provisions of the Investment Promotion Authority Act, when it had engaged in business dealings or activities with the 2^nd defendant. The plaintiff asked the Court to make declaratory orders to prevent the 1^st defendant from conducting any oil palm business or activities in Papua New Guinea. He also asked the Court to make a declaration to nullify a lease agreement which the plaintiff said was entered between the 1^st and 2^nd defendants on 19 January 2017. The defendants argued that there was no controversy to the main relief. But regardless, they challenged the plaintiff’s primary right and interest in the matter.

Held

1. The plaintiff’s claim to act on behalf of block holders was not substantiated with evidence.
   
2. The plaintiff has not sufficiently explained nor disclosed evidence of his primary right or interest in the matter.

(Case followed: Amos Ere v. National Housing Corporation (2016) N6515)

3. A proper hearing may be warranted under the circumstances to address, amongst others, the above issues so the application for summary judgment was refused with cost.
   

Cases cited:

Amos Ere v. National Housing Corporation (2016) N6515
Tigam Malewo v Keith Faulkner (2009) SC960

Counsel:

Mr N. Namani with counsel assisting Mr Kwaimani, for the Plaintiff
Mr E. Wamp, for the First and Second Defendants

RULING

28^th September, 2018

1. ANIS J: The plaintiff applied for summary judgment. The matter was heard on 10 September 2018. I reserved my ruling to today at 9:30am. The matter was further deferred to 1:30pm. This is my ruling.

APPLICATON

2. The application for summary judgment was filed on 22 August 2018. It is made under Order 12 Rule 38(1) of the National Court Rules. Term 1 of the application states, and I read, Pursuant to Order 12, Rule 38(1) of National Court Rules, Summary Judgment be entered against the Defendants. Rule 38(1) states, and I read:

Where, on application by the plaintiff in relation to any claim for relief or any part of any claim for relief of the plaintiff –

(a) there is evidence of the facts on which the claim or part is based; and
(b) there is evidence given by the plaintiff or by some responsible person that, in the belief of the person giving the evidence, the defendant has no defence to the claim or part, or no defence except as to the amount of any damages claimed,

the Court may, by order, direct the entry of such judgment for the plaintiff on that claim or part as the nature of the case requires.

ISSUES

3. Before I address the application, let me firstly deal with the preliminary issues raised by the defendants. The defendants question the plaintiff’s standing and primary right in the proceeding. Secondly, the defendants refer to the doctrine, privity of contract, and they argue that no contractual relationship exists between the plaintiff and them, in relation to the agreement signed on 19 January 2017. Thirdly, the defendants argue that section 41A of the Investment Promotion Authority Act 1992 (IPA Act) precludes the plaintiff, as an authorised person, within the meaning of section 41A, from filing proceedings such as this.

RELIEF

4. Let me begin by setting out the relief sought in the originating summons. I quote:

1. An Order in the nature of a Declaration that the First Defendant is not certified and permitted under the Investment Promotion Authority Act 1992 to conduct any Palm Oil business activity in Papua New Guinea.
2. Consequent to a Declaration made in Order 1 herein, a further Order in the nature of a Declaration that the Lease Agreement executed between the Defendants on 19^th January 2017 for Palm Oil activities is null and void.
   

5. At the start of the hearing, the defendants began as follows. Firstly, they submit that they do not dispute the main relief. They say the relief was in fact not a controversy between the parties. The plaintiff’s counsel in response produced an email correspondence that had been exchanged between the parties, by way of evidence, to confirm this position. The defendants submit that what the plaintiff was seeking under the first relief is the actual status of the 1^st defendant, which is that the First Defendant is not certified and permitted under the Investment Promotion Authority Act 1992 to conduct any Palm Oil business activity in Papua New Guinea. But as stated, the defendants maintain their preliminary issues which they claim should be enough to dismiss the application for summary judgment. They also challenge the second relief.

PRIMARY RIGHT?

6. So, let me ask this. “What primary right is the plaintiff seeking to protect, enforce or satisfy?” I have considered the relief sought in the originating summons. I have heard arguments by the parties and I have also considered the evidence filed. A brief background of the facts is as follows. The second defendant is a landowner group. It is presumably incorporated under the provisions the Land Group Incorporation Act Chapter No. 147 (as amended). It holds a certificate of title over a land described as Portion 910C Milinch Pondo, Fourmil Rabaul, East New Britain (the land). The land, which was initially customary land, was registered as a lease under section 34L of the Land Registration Act Chapter No. 191, on 14 October 2015. Upon registration, the land was leased by the State to the second defendant who currently holds the title as its registered proprietor. The total land area of the land is 500 hectares. It is not disputed that the 1^st and 2^nd defendants entered into a sub-lease agreement to grow oil palm on the land on 19 January 2017. The 1^st defendant has filed evidence which also shows that following the said agreement, the 1^st defendant had on 21 January 2017, assigned its interest in the sub-lease over the land, to a 3^rd party called East New Britain Palm Oil Limited (third party).

7. The plaintiff’s claim is this. He claims that he represents the interests of various block holders within the land. He claims that their interests are affected by the above dealings between the defendants and the third party. As such, he seeks declaratory relief. Now, the first deficiency I notice is this. The plaintiff has not filed any evidence concerning or that addresses the people whom he claims to represent. For example, where is the evidence of the authority given by these persons to the plaintiff and to his lawyer, to represent them? [See Supreme Court case of Tigam Malewo v Keith Faulkner (2009) SC960]. What are their names? And where is the evidence that shows that these people or block holders come from areas that are within his ward boundaries? And if he is suing in his capacity as a ward member, what primary right or rights is he seeking to protect? Justice Hartshorn, in the case of Amos Ere v. National Housing Corporation (2016) N6515, states at paragraphs 11 and 12 of his judgment, and I read in part:

Declaratory relief

11. As the plaintiffs seek declaratory relief, it is necessary to consider the factors that are required to be established before a declaratory order can be made.

12. The factors are:

1. There must exist a controversy between the parties;
2. The proceedings must involve a right;

100. The proceedings must be brought by a person who has a proper or tangible interest in obtaining the order;

4. The controversy must be subject to the court’s jurisdiction;
5. The defendant must be a person having a proper or tangible interest in opposing the plaintiff’s claim;
6. The issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility.
   

8. I adopt these views as my own. In doing so and applying them, I note the following. Firstly, I note that there is no controversy between the parties concerning the main relief (i.e., relief 1) sought in the originating summons. The first defendant does not deny its status as a foreign entity under the requirements as stipulated under the IPA Act, and that based on the said IPA Act, that it (i.e., the first defendant) is not permitted to conduct any Palm Oil business activity in Papua New Guinea. That aside, the defendants claim that the plaintiff does not have a primary right which he is seeking to protect. This leads me to the second consideration referred to in Amos Ere’s case. I must say that I am doubtful of the plaintiff’s primary right. If he is seeking to protect the rights of some other people or groups of people, then who are these people? Again, and as I have said above in my judgment, there is no evidence disclosed that explains that. It may therefore perhaps be an issue that should be properly determined. I refer to the third consideration, that is, tangible interest. In my view, the said consideration cannot be determined without first properly identifying the persons whom the plaintiff is claiming to represent.

9. In my view, I do not think that I should tick-off all the considerations that are stated in the Amos Ere’s case. What I have found so far suggests to me that there are serious preliminary issues that perhaps should require attention.

WARD MEMBER

10. Besides my findings regarding the plaintiff’s primary right, let me also say this. The plaintiff commenced the proceeding in his capacity as the Ward Member of Lamarainam, Inland Baining Local Level Government, Gazelle District of East New Britain Province. Obviously, he holds a public office which is established under the Organic Law on Provincial and Local Level Government. He represents the local area called Lamarainam which is in the Inland Baining Local Level Government (LLG). The LLG falls under the Gazelle District of East New Britain Province.

11. Let me begin with this remark. If for any reason, the plaintiff is held to be accountable by this Court, his local or provincial government may also be held accountable, or is it not the case? In the present case, despite the said express representation made by the plaintiff (i.e., that he is suing in his capacity as a ward member), he has expressly told the Court through his counsel that he was representing the interest of individuals or certain block holders whose interests in the land were affected because of the alleged actions of defendants and the third party. To me, this suggests that he may be representing the private interests of individuals or groups. If that is correct, then the obvious question to ask would be this. Can the plaintiff, in his capacity as a ward member, represent private interests of individuals or groups? Or has he sought the necessary approval from the people that he represents, or from the other ward members or authorities and so forth, before filing these proceedings in the first place?

12. In my opinion, these are legitimate questions which should be properly addressed by the Court.

PRIVITY OF CONTRACT

13. The defendants argue in relation to the second relief, that there was no privity of contract between the plaintiff and the defendants, concerning the private contractual agreement that was signed between the defendants on 19 January 2017, which the plaintiff now seeks to declare as null and void. The plaintiff, in my view, did not provide valid or sufficient arguments in response to the defendants’ claim and submission on point.

14. In my view, the issue is not a difficult one. The plaintiff does not deny that it had or has no dealings or interest to the agreement dated 19 January 2017. That being the case, I find that there appears to be an arguable case put forward by the defendants, that is, under the doctrine, privity of contract. This should therefore, in my view, be subject to a proper hearing.
SUMMARY - PRELIMINARY FINDINGS

15 I find that the plaintiff’s primary right was sufficiently or reasonably questioned by the defendants as a preliminary matter, in this application for summary judgment. I also find that the plaintiff has provided insufficient evidence at this stage in relation to the said issue. In my view, the matter should be left for proper consideration.

16. I also find that the plaintiff’s standing was reasonably challenged by the defendants. This is an issue which I think should also later be properly considered by the Court. I say the same to the defendants’ submission that was based on the doctrine, privity of contract. That is, the facts and submissions presented tend to alienate the plaintiff from the signed agreement of 19 January 2017. This therefore is something which the Court would have to consider in detail at an appropriate time. The parties of course will be given sufficient time and opportunity to properly argue the matter.

17. With these uncertainties ‘hanging in the air’, so to speak, should the Court proceed on and deal with the substantive matter which is the application for summary judgment? My answer to that is, “no”. On that basis, I will refuse to grant the plaintiff’s application for summary judgment based on my preliminary findings.

18. Now, I note that I did not consider the third preliminary issue, that is, in relation to arguments concerning section 41A of the IPA Act. I will refrain from so doing given my findings and decisions in relation to the first two (2) preliminary issues.

COST

19. Cost is discretionary. I will award cost of the application to the defendants on a party/party basis which may be taxed if not agreed.

THE ORDERS OF THE COURT

1. The plaintiff’s application for summary judgment is refused.
2. Cost of the application is awarded to the defendants on a party/party basis which may be taxed if not agreed.
3. Time for entry of these orders is abridged to the date of settlement by the Registrar of the National Court which shall take place forthwith.
   

The Court orders accordingly.
_____________________________________________________________
Namani Lawyers: Lawyers for the Plaintiff
Edward Wamp Lawyers: Lawyers for the Defendants