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Herowa v Andama [2021] PGNC 138; N8902 (1 July 2021)

N8902

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 8 OF 2020

BEN ANUBI HEROWA, DEPUTY CHAIRMAN,
JUHA SPECIAL PURPOSES AUTHORITY
Plaintiff

V

PETER LANGA ANDAMA, CHAIRMAN,
JUHA SPECIAL PURPOSES AUTHORITY
First Defendant

ALEX ARABIA, TREASURER,
JUHA SPECIAL PURPOSES AUTHORITY
Second Defendant

HON PILA NININGI MP,
MINISTER FOR INTER-GOVERNMENT RELATIONS
Third Defendant

DICKSON GUINA, SECRETARY,
DEPARTMENT OF INTER-GOVERNMENT RELATIONS
Fourth Defendant

HON KERENGA KUA MP, MINISTER FOR PETROLEUM & ENERGY
Fifth Defendant

DAVID MANAU, SECRETARY,
DEPARTMENT OF PETROLEUM & ENERGY
Sixth Defendant

THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Seventh Defendant

Waigani: Cannings J
2021: 20 May, 3 June, 1 July

LOCAL-LEVEL GOVERNMENTS – local-level government special purposes authorities – Local-level Governments Administration Act 1997 – dispute amongst members of management board of special purposes authority re positions of chairman and treasurer – meetings of management board – whether decision of management board to suspend chairman and treasurer was lawful – whether meeting of management board lawfully called and conducted – whether decision of Minister for Inter-Government Relations to suspend chairman and treasurer was lawful.

The plaintiff sought various declarations and orders regarding management of a special purposes authority established under the Local-level Governments Administration Act: (1) that resolutions of the management board to suspend the chairman and treasurer (first and second defendants) are legal and binding; (2) that the first and second defendants lacked power and authority to deal with any of the business of the special purposes authority; (3) that the decision of the Minister for Inter-Government Relations, conveyed by a letter to the parties, to suspend the first and second defendants and to appoint the plaintiff as acting chairman, is legal and binding; (4) that publication of that decision in the National Gazette is legal and binding; (5) that the first and second defendants surrender all properties and assets of the special purposes authority in their possession to the plaintiff; (6) that the first and second defendants are liable for damage to properties and assets of the special purposes authority in their possession.

Held:

(1) All relief sought by the plaintiff was refused as: (a) the purported management board meetings at which it was resolved to suspend the first and second defendants were not called or conducted in accordance with the constitution of the special purposes authority, the board had no unilateral power to suspend the chairman or treasurer and there was no quorum at either meeting; (b) the Minister’s decision to suspend the first and second defendants and appoint the plaintiff as acting chairman was not made in accordance with the authority’s constitution and not authorised by any statute and was based on resolutions made at the purported management board meetings that had no legal basis; (c) publication of the Minister’s decision in the National Gazette did not cure the apparent defects in the decision or render it lawful; (d) there was no good reason to order the first and second defendants to surrender any property or assets or to declare that they are liable for any damages.

(2) The proceedings were dismissed, with costs.

Cases Cited

The following cases are cited in the judgment:

Gene v Thompson (2007) N3254
Hamaka v Dion (2016) N6249
Namo’Aporo Landowners Association Inc v Sakai (2020) N8178
Natto v Sakai (2019) N7866

TRIAL

This was a trial of an originating summons seeking declarations and orders regarding management of a local-level government special purposes authority.

Counsel

J Kolo & C Sumba, for the Plaintiff
S Dadada, for the First and Second Defendants

1^st July, 2021

1. CANNINGS J: This case is about management and control of the Juha Special Purposes Authority. It is an incorporated entity established under Part VII of the Local-level Governments Administration Act 1997 to administer the affairs of customary landowners of the North Koroba Local-level Government area, Koroba-Kopiago District, Hela Province, regarding the PDL-9 LNG project.

2. The plaintiff, Ben Anubi Herowa, is deputy chairman of the authority. The first defendant, Peter Langa Andama, is chairman. The second defendant, Alex Arabia, is treasurer. A number of other parties have been named as defendants but they took no part in the case, which has proceeded to trial.

3. The plaintiff applies by an amended originating summons filed 13 October 2020 for declarations and orders that can be put in the following categories:

(1) a declaration that resolutions of the management board to suspend the chairman and treasurer (first and second defendants) are legal and binding (amended originating summons, paragraphs 1 and 2);

(2) a declaration that the first and second defendants lack power and authority to deal with any of the business of the special purposes authority (amended originating summons, paragraph 3);

(3) a declaration that the decision of the Minister for Inter-Government Relations (third defendant) to suspend the first and second defendants and to appoint the plaintiff as acting chairman is legal and binding (amended originating summons, paragraphs 4 and 5);

(4) a declaration that publication of that decision in the National Gazette is legal and binding (amended originating summons, paragraph 6);

(5) an order that the first and second defendants surrender all properties and assets of the special purposes authority in their possession to the plaintiff (amended originating summons, paragraph 7);

(6) an order that the first and second defendants are liable for any damage to properties and assets of the special purposes authority in their possession (amended originating summons, paragraph 8).

4. The first and second defendants oppose all that relief. They argue that the purported resolutions to suspend them are unlawful and have no effect, so the first declarations sought by the plaintiff ought to be refused and, if the Court accepts that argument, all other relief should also be refused.

5. I address the six categories of relief in turn.

(1) RESOLUTIONS TO SUSPEND FIRST AND SECOND DEFENDANTS

6. The plaintiff claims that management board meetings were held at the Holiday Inn Hotel, Port Moresby, on 10 and 26 March 2020, which documented allegations of misappropriation by the first and second defendants of the authority’s funding of K2 million that had recently been deposited into the authority’s bank account. The plaintiff claims that those meetings were conducted in accordance with the proclamation issued on 18 May 2015 by then Governor-General, Grand Chief Sir Michael Ogio, establishing the authority, and chaired by the authority’s general secretary, Stanley Hogga Piawi, and a quorum was present. The plaintiff says that the authority at that time had no constitution governing its affairs, and still has none, and that its governing law remains the 2015 proclamation. The decision to suspend the first and second defendants was therefore valid and effective.

7. I reject those submissions as, although I am satisfied, based on the evidence of the plaintiff, that there were in fact two meetings held at the Holiday Inn on 10 and 26 March 2020, I accept the evidence provided by the first and second defendants that there is a constitution governing the affairs of the authority, which was approved by the then Minister for Inter-Government Relations, Hon Kevin Isifu MP, on 16 November 2018, in accordance with specification (m) of the 2015 proclamation.

8. That constitution, I find, commenced operation on the date of ministerial approval. It provides under section 4 for a 15-member membership board. Section 11 (meetings of the authority) provides for calling of meetings of the management board in the following terms:

(1) The Board shall hold meetings at such a time, at such places within the Local-level Government area of Koroba-Lake Kopiago District or Port Moresby or any regional offices where board think the safe and secured places. The board shall hold four (4) meetings in one (1) year, as the chairman or in his absence the deputy chairman determines, but in any event not less frequently than once in every two (2) months.

(2) Where he receives a request to do so made in writing by not less than five (5) members, the chairman or in his absence the deputy chairman shall convene a meeting of the Authority within 14 days. [sic]

9. It is clear that the meetings of 10 and 26 March 2020 were not called and conducted in accordance with section 11.

10. I have considered whether the management board could in some other way meet and decide to suspend the chairman and treasurer, which is what the plaintiff claims was done in this case. Under the constitution the issue of suspension of the chairman is alluded to in section 6 (term of office):

A member appointed under section 4(2) shall be appointed for a period of three (3) years, but the person or the body appointing the member may review the appointment annually.

Because the chairman elected unopposed by the board other than appointed board the section 4(2) does not apply to the office of chairman thus the chairman shall serve infinite period unless otherwise decided by the full board for any allegation of corruption, abuse of power, undue influence or bribery etc then the board through the office of deputy chairman shall give 2 weeks’ notice by formally writing to chairman to notify him of the board intention to refer to department secretary/minister for provincial & LLG matters and upon assessment of board decision the secretary/minister have the prerogative to make decision such as suspension from office, refer to police or further actions deemed appropriate.

11. Section 6 is poorly drafted but it is reasonably clear that the intention was to give the board, through the office of deputy chairman, power to refer the chairman to the Secretary or Minister for Inter-Government Relations, so that an appropriate decision would be made. Section 6 gives no power to the board, even if it is properly convened, to unilaterally suspend the chairman.

12. I also find that there was no quorum at the meetings of 10 and 26 March 2020. The management board, according to section 4(2) of the constitution, consists of 15 members. Section 12(1) (quorum and voting) states:

One half of the members present shall form the quorum of any meeting.

13. That provision is poorly drafted; however it gives a sufficient indication that the quorum is intended to be one-half of the members of the management board. Any doubt about its meaning is resolved by relying on the general principle regarding quorums, arising from s 39 (powers of majority) of the Interpretation Act, that a quorum for any entity established by or under a statute is a simple majority: 50% of the total membership or if the total membership is an odd number, the next highest integer after the number that is 50% (Gene v Thompson (2007) N3254, Natto v Sakai (2019) N7866, Namo’Aporo Landowners Association Inc v Sakai (2020) N8178). Here the total board membership is 15, 50% of which is 7.5, so the quorum is 8. There were only five board members recorded as present at the 10 March and 26 March 2020 meetings.

14. To sum up, I decline to grant the declarations sought by the plaintiff regarding the purported board resolutions of 10 and 26 March 2020 as the meetings were not called and conducted in accordance with the authority’s constitution, the board had no unilateral power to suspend the chairman or treasurer and there was no quorum at either meeting.

(2) POWER OF FIRST AND SECOND DEFENDANTS TO DEAL WITH BUSINESS OF THE AUTHORITY

15. The plaintiff’s application for a declaration that the first and second defendants lack power or authority to deal with any business of the authority depends on the purported resolutions at the meetings of 10 and 26 March 2020 being binding and effective. I have declined to make declarations sought regarding those meetings. I therefore decline to declare that the first and second defendants lack power or authority.

(3) MINISTER’S DECISIONS TO SUSPEND FIRST AND SECOND DEFENDANTS

16. The Minister for Inter-Government Relations, Hon Pila Niningi MP, decided to suspend the first and second defendants as chairman and treasurer of the authority and to appoint the plaintiff as acting chairman, decisions that were conveyed in separate letters dated 5 May 2020 addressed to the first defendant, the second defendant and the plaintiff respectively. Each decision was based on the seriousness of the allegations of misappropriation against the first and second defendants and the board resolution of 26 March 2020.

17. The plaintiff seeks declarations that the Minister’s decisions, recorded in that letter, are legal and binding. I decline to grant such declarations as the Minister’s decisions:

(a) were not made in accordance with the authority’s constitution, which is the dominant law governing the management of the authority, which was made in accordance with the 2015 proclamation;

(b) do not appear to be authorised by any statute, in particular, Part VII of the Local-level Governments Administration Act (local-level government special purpose authorities) contains no provision allowing the Minister to suspend members of a management board of a special purposes authority (in that regard, see Hamaka v Dion (2016) N6249);

(c) are not supported by the law relied on by the Minister, specification (o) of the 2015 proclamation, which provides, generally, that the authority “may, in the event of difficulties, seek the advice of the Minister and any decision of the Minister is final”, and which is inapplicable here as the authority has not, in the relevant sense, sought the advice of the Minister;

(d) were based on resolutions made at the purported management board meetings of 10 and 26 March 2020 that have been found to have no legal basis;

(4) PUBLICATION OF MINISTER’S DECISIONS IN NATIONAL GAZETTE

18. The Minister’s decisions regarding management of the authority were published in National Gazette No G294 of 26 May 2020 in the following terms:

Local-Level Governments Administration Act 1997

SUSPENSION OF CHAIRMAN AND APPOINTMENT OF ACTING CHAIRMAN OF THE MANAGEMENT BOARD OF THE JUHA SPECIAL PURPOSES AUTHORITY ESTABLISHED UNDER THE NORTH KOROBA RURAL LOCAL-LEVEL GOVERNMENT IN HELA PROVINCE

I, Hon PILA NININGI, MP, Minister for Inter-Government Relations, by virtue of powers conferred by the Juha Hela Special Purposed Authority Proclamation under 'Item O', Juha Special Purposes Authority (JSPA) Special Board Meeting Resolutions of 10th and 26th March 2020, JSPA Letter dated 30th March 2020 and Court Order of 3rd May 2020 of Court proceedings styled as OS No 8 of 2020 Ben Anubi Herowa & Anor v Peter Langa Andama & Ors;

1. I hereby suspend the Juha Special Purposes Authority Management Board Chairman, Peter Langa Andama, until the allegations of misappropriation of Two Million Kina (K2,000,000.00) and misconduct in office made against him are cleared by the relevant authorities; and,
   
2. I hereby appoint the Deputy Chairman, Ben Anubi Herowa, as the Acting Chairman of the Juha Special Purposes Authority Management Board, taking immediate effect.
   

Dated this 5th day of May, 2020.

Hon P NININGI, LLB, PM

Minister for Inter-Government Relations.

19. The plaintiff seeks a declaration that gazettal of the decisions is legal and binding. I decline to grant such a declaration as publication of the Minister’s decisions in the National Gazette did not cure the apparent defects in the decisions or render those decisions – which appear to the Court, for the purposes of this case, to be unlawful – lawful.

(5) SURRENDER OF PROPERTIES AND ASSETS

20. The plaintiff seeks an order in the nature of an injunction requiring the first and second defendants to surrender any properties or assets of the authority to the plaintiff in his capacity as acting chairman. I refuse to make such an order as there exists no legal basis for it, arising from these proceedings.

(6) LIABILITY FOR DAMAGE TO PROPERTIES AND ASSETS

21. The plaintiff seeks an order that the first and second defendants are liable for any damage to any properties or assets of the authority in their possession. I refuse to make such an order as there exists no legal basis for it, arising from these proceedings.

CONCLUSION

22. All the plaintiff’s claims for relief will be refused and the proceedings will be dismissed. The first and second defendants have submitted that if the Court decided the case in that way, it should proceed to issue a permanent order against the plaintiff and the Minister for Inter-Government Relations restraining them from taking any further steps to implement the purported resolutions at the meetings on 10 and 26 March 2020. I decline to make such an order. It should have been made the subject of a separate and formal application, via a cross-claim, if that issue were to be properly before the Court. There was no cross-claim. Costs will follow the event.

ORDER

(1) The relief sought in the amended originating summons filed 13 October 2020 is refused and the proceedings are dismissed.

(2) The plaintiff shall pay the first and second defendants’ costs of the proceedings on a party-party basis, which shall, if not agreed, be taxed.

(3) The file is closed.

________________________________________________________________
Coomers Lawyers: Lawyers for the Plaintiff
Kumbari & Associates Lawyers: Lawyers for the First & Second Defendants