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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO 85 OF 2020
IN THE MATTER OF AN ORIGINATING SUMMONS:
WOLUTOU INCORPORATED LAND GROUP
Plaintiff
V
DAVID MANAU, SECRETARY,
DEPARTMENT OF PETROLEUM & ENERGY
First Defendant
HON KERENGA KUA, MINISTER FOR PETROLEUM & ENERGY
Second Defendant
DR KEN NGANGAN, SECRETARY, DEPARTMENT OF FINANCE
Third Defendant
K C PAONGA, ACTING CHIEF COMMISSIONER,
LAND TITLES COMMISSION
Fourth Defendant
HON JOHN ROSSO,
MINISTER FOR LANDS & PHYSICAL PLANNING
Fifth Defendant
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Sixth Defendant
JOSHUA TURAHA & BUSUNAE POSOU OF
ISEWARI BUPUKU GOHU CLAN
Seventh Defendant
ISEWARI BUPUKU GOHU INCORPORATED LAND GROUP
Eighth Defendant
PAUL SAPAKE, JASON TIRIME, YAXIE YAKORIA &
NELSON YEKILI OF IMAWE BOGASI CLAN
Ninth Defendants
TOALE HONGIRI INCORPORATED LAND GROUP,
TIASAPI INCORPORATED LAND GROUP &
YENIDOU BOGASI INCORPORATED LAND GROUP
Tenth Defendants
DIKALA YAWEWE, CLAN CHIEF,
YAHAPU KAIAI NOGOLU INCORPORATED LAND GROUP
Eleventh Defendant
LIMPIA SAYABE, DEPUTY CHAIRMAN,
YAHAPU KAIAI NOGOLU INCORPORATED LAND GROUP
Twelfth Defendant
AND IN THE MATTER OF TWO CROSS-CLAIMS:
THE SEVENTH TO TENTH DEFENDANTS
As First to Fourth Cross-claimants respectively
V
THE PLAINTIFF & THE FIRST TO SIXTH DEFENDANTS
As First to Seventh Cross-defendants respectively
Waigani: Cannings J
2021: 9th, 15th February, 8th, 9th, 10th March, 6th April
LAND – customary land ownership – equity and royalty benefits due to customary landowners under Oil and Gas Act 1998 – effect of incorporated land group being granted Special Agricultural and Business Lease over part of disputed land – role of Land Titles Commission – Land Disputes Settlement Act – previous Court orders in other proceedings – declarations sought by competing parties – cross-claims.
Underlying this case is a dispute over equity and royalty benefits due to customary landowners under the Oil and Gas Act 1998 regarding the Gobe oilfields project. The plaintiff is an incorporated land group which is the registered proprietor of a Special Agricultural and Business Lease (SABL) covering a large area of the disputed land. The plaintiff sought a declaration that its SABL was lawfully granted to it, and that, based on its SABL and a declaration made by the Acting Chief Land Titles Commissioner and a determination of the Minister for Petroleum in 2016, it is entitled to the bulk of the benefits, and an order that the first defendant, the Director of Petroleum facilitate payment to it of outstanding equity and royalty benefits. Other clans and incorporated land groups are also defendants and they argued that all relief sought by the plaintiff in the originating summons should be refused. They filed two cross-claims against the plaintiff and the governmental defendants seeking, amongst other things, declarations that would give effect to various mediated agreements entered into as an adjunct to previous National Court proceedings and that the plaintiff be estopped from relying on its SABL to enforce any entitlement to equity and royalty benefits and an order requiring the Secretary for Petroleum & Energy to facilitate payment to them some of those benefits.
Held:
(1) With one exception, the relief sought by the plaintiff in its originating summons was refused as there was insufficient evidence that its SABL had been lawfully granted in accordance with the procedures of the Land Act and the declaration of the Chief Commissioner and the determination of the Minister for Petroleum had both been rescinded soon after being made in 2016, and a Supreme Court order made in 2016 that the question of customary ownership of the Gobe oilfields land be returned to the Land Titles Commission for resolution, had not been complied with.
(2) The exception related to an injunction that would restrain payment of equity and royalty benefits until final determination of competing claims to customary land ownership.
(3) With one exception, the relief sought in the cross-claims was refused as the mediated agreements that the cross-claimants were seeking to enforce are unenforceable due to the National Court proceedings, which provided the purported basis of those mediated agreements, being dismissed by order of the Supreme Court in 2016, and there was no good reason to estop the plaintiff from relying on its SABL, and the question of customary land ownership had not yet been resolved, so it would be premature for the Court to order payment of any equity or royalty benefits to any clan or entity until resolution of that question.
(4) The exception related to the order sought in the second cross-claim that the Supreme Court order made in 2016 that the question of customary ownership of the Gobe oilfields land be returned to the Land Titles Commission for resolution, be enforced. It is critical that the Supreme Court order be enforced as, once the question of customary land ownership is resolved, the proper landowner beneficiaries of equity and royalty benefits can be identified.
(5) Ordered: that the Land Titles Commission (represented in these proceedings by the fourth defendant) resolve the question of customary land ownership. Other orders made to promote enforcement of that order. Other relief sought in both the originating summons and the cross-claims refused. Parties ordered to bear their own costs.
Cases Cited
The following cases are cited in the judgment:
Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110
David Mota v Albert Camillus (2017) N6810
Doriga Mahuru v Hon Lucas Dekena (2013) N5305
Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215
Golpak v Kali [1993] PNGLR 491
In the Matter of Appeals by Imawe Bogasi, Isewari Bupuku Gohu, Haporopake & Sumbala Clans, CA Nos 111, 134 and 190 of 2000, 04.12.00, unreported
In the matter of the Special Land Titles Commission re a Dispute over Land Generally Known as the Gobe Main and the South-East Gobe
Oil Project in the Land Region of the Gulf and Southern Highlands Provinces, 29.02.96, unreported
Kol Toki v Moeka Morea (2016) SC1588
Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120
Lavu v Thompson & NBPOL (2007) N5018
Musa Valley Management Company Ltd v Pepi Kimas (2010) N3827
PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126
Pundi v Rupen (2015) SC1430
Ronny Wabia v BP Exploration Co Ltd [1998] PNGLR 8
Siaman Riri v Simion Nusai (1995) N1375
Sioti Bauf and Lavoi Nodai v Poliamba Pty Ltd [1990] PNGLR 278
Soso Tumu for Luhalipu Clan & Ors v The State & Ors [2002] PNGLR 250
The State v Central Provincial Government (2009) SC977
The State v Lohia Sisia [1987] PNGLR 102
Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2012) SC1201
Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2016) SC2081
TRIAL
This was a joint trial of an originating summons and two cross-claims.
Counsel
P P Yapa, for the Plaintiff and First Cross-Defendant
J Haiara, for the Seventh to Tenth Defendants and First to Fourth Cross-Claimants
A Walne, for the Eleventh and Twelfth Defendants
6th April, 2021
1. CANNINGS J: Underlying this case is a dispute over equity and royalty benefits payable to customary landowners under the Oil and Gas Act 1998 regarding the Gobe oilfields project, which straddles Gulf and Southern Highlands Provinces.
2. The plaintiff, Wolutou Incorporated Land Group, is the registered proprietor of a Special Agricultural and Business Lease (SABL) covering a large part of the disputed land. The plaintiff seeks a declaration that its SABL was lawfully granted to it, and that, based on its SABL and a declaration made by the Acting Chief Land Titles Commissioner and a determination of the Minister for Petroleum in 2016, it is entitled to the bulk of the benefits. The plaintiff also seeks, amongst other relief, an order that the first defendant, the Secretary of the Department of Petroleum and Energy (and the Director of Petroleum under the Oil and Gas Act) and other governmental defendants (the first to sixth defendants are described as such in this judgment) facilitate payment to it of outstanding equity and royalty benefits.
3. The governmental defendants have been unrepresented at the trial of these proceedings. This is unfortunate and I will comment on that later.
4. Other clans and incorporated land groups claiming an interest in the disputed land are the seventh to twelfth defendants. The seventh to tenth defendants are represented by Haiara’s Legal Practice and their counsel is Mr Haiara. The eleventh and twelfth defendants, who support the seventh to tenth defendants in both the originating summons and the two cross-claims, are represented by Wantok Legal Group and their counsel is Mr Walne. All defendants argue that all relief sought by the plaintiff in the originating summons should be refused.
5. The seventh to tenth defendants filed two cross-claims against the plaintiff and the governmental defendants seeking, amongst other things, declarations that would give effect to various mediated agreements entered into as an adjunct to previous National Court proceedings and that the plaintiff be estopped from relying on its SABL to enforce any entitlement to equity and royalty benefits and an order requiring the Secretary for Petroleum & Energy to facilitate payment to them of some of those benefits.
6. I will deal first with the originating summons and then move to the two cross-claims.
ORIGINATING SUMMONS
7. The plaintiff seeks the following relief:
8. To summarise, the plaintiff is seeking:
(a) a declaration that its SABL was lawfully granted (originating summons, para 1);
(b) a declaration that a declaration by the Chief Commissioner of the Land Titles Commission in 2016 is correct and lawful (originating summons, para 2);
(c) a declaration that a determination under s 169 of the Oil and Gas Act by the then Minister for Petroleum and Energy, Hon Nixon Duban MP, in 2016 is valid and enforceable and supersedes similar determinations by Ministers Hon Roy Yaki MP in 2002 and Hon Sir Moi Avei MP in 2003 (originating summons, paras 3 and 4);
(d) declarations that the actions of the Secretary for Petroleum & Energy (first defendant) and the Secretary for Finance (third defendant) regarding payment of equity and royalty benefits based on the 2003 ministerial determination are illegal and null and void (originating summons, paras 5 and 6);
(e) an order that all equity and royalty benefits due to the plaintiff in respect of the period from 1999 to 2020, plus revenue lost as a result of payments made to persons who are not true landowners be paid within 21 days (originating summons, paras 7 and 8);
(f) an order restraining the payment of equity and royalty benefits until full determination of substantive issues by the Court (originating summons, para 9).
9. I determine those claims for relief in the following way.
(a) A declaration that the plaintiff’s SABL was lawfully granted
10. There is ample evidence that the plaintiff is the registered proprietor of an SABL over a large area of the disputed land. The SABL was granted over land described as “Portion 7C, Milinch Keivi (SE), Bahia (NE) & Barisa (SW), Fourmil Kutubu & Aworra in SHP and Gulf Provinces containing an area of 81,028 hectares” to Wolutou Land Group Inc by the Minister for Lands and Physical Planning on 18 July 2011. However, I decline to make the declaration sought by the plaintiff that the SABL was lawfully granted or that the Minister’s decision to grant the SABL was correct and lawful, for two reasons.
11. First, the procedures under the Land Act, ss 10 and 11, by which customary land is acquired by the State and then leased in the form of a SABL under s 102 of the Land Act, are complex and elaborate, and often contentious and controversial. I have set out those procedures in a number of cases including Musa Valley Management Company Ltd v Pepi Kimas (2010) N3827, Doriga Mahuru v Hon Lucas Dekena (2013) N5305 and David Mota v Albert Camillus (2017) N6810.
12. Compliance with the procedures is dependent on securing the agreement of the customary landowners at each stage of the process. There is insufficient evidence that the Wolutou Clan (or sub-clan, as many of the defendants argue that it is a sub-clan of the Imawe Bogasi Clan) is the proper customary owner of Portion 7C. Indeed, the unresolved question about who are the proper customary owners of the disputed land, including Portion 7C, is the main reason that this case has been filed.
13. Secondly, if Wolutou Clan were assumed to be the proper customary owner of Portion 7C (which is an unwarranted assumption), there is still insufficient evidence that the procedures in ss 10, 11 and 102 of the Land Act have been complied with.
14. The plaintiff has fallen well short of persuading me that I should grant the declaration sought.
15. This is not to say that the plaintiff is not the registered proprietor of Portion 7C. It is. Its title has not to my knowledge been set aside by the decision of any court or other proper tribunal. Its title is protected by s 33 of the Land Registration Act unless and until it is set aside by such a decision.
16. However, I reiterate that there is insufficient evidence to warrant a declaration that the SABL was lawfully granted or that the Minister’s decision to grant the SABL was correct and lawful. The application for such relief is refused.
(b) A declaration that a declaration by the Chief Commissioner of the Land Titles Commission in 2016 is correct and lawful
17. The plaintiff seeks a declaration that the following declaration of the Acting Chief Commissioner of the Land Titles Commission (the fourth defendant), published in National Gazette No G785 of 19 October 2016, is correct and lawful:
WOLUTOU LAND GROUP INC, ILG NO 6323
I, KUTT C PAONGA, Acting Chief Commissioner, Land Titles Commission, pursuant to Section 42 of the Land Titles Commission Act (as
amended) and as clearly stated by [Section] 17 of the National Land Registration Act (as amended) and all other powers me enabling,
hereby declare that:
WOLUTOU LAND GROUP INC, an incorporated and registered land group, registered number being ILG NO 6323, is the legitimate customary
owner of all that parcel of land described as Portion 7C, Milinch KEIVI (SE) BAHIA (NE) & BARISA (SW) Fourmil of KUTUBU &
AWORRA in the Southern Highlands & Gulf Province of Papua New Guinea and having an area of 81,028 hectares is registered and
contained in State Lease Volume 17 Folio 07 which was registered on the 21st day of July, 2011 by the Registrar of Titles.
Dated this day 18th day of October 2016
K C PAONGA LLB
18. For two reasons, I decline to make the declaration sought. First and foremost, the Acting Chief Commissioner’s declaration was withdrawn soon after it was made, by the following declaration published in National Gazette No G816 of 28 October 2016:
NOTICE OF WITHDRAWAL OF DECLARATION OF WOLUTOU ILG AND PORTION 07 MILINCH KEIVI (SE) BAHIA (NE) & BARISA (SW) FOURMIL OF KUTUBU & AWORRA
I, KUTT C PAONGA, Acting Chief Commissioner, Land Titles Commission, hereby give Notice that:
The publication and declaration in National Gazette No G785 on 18th October 2016 wherein WOLUTOU LAND GROUP INC was declared as being the legitimate customary [landowner] over the portion of land described above, being Portion 7C, Milinch KEIVI (SE) BAHIA (NE) BARISA (SW) Fourmil of KUTUBU & AWORRA in Southern Highlands & Gulf Province is hereby withdrawn.
Dated this 28th day of October, 2016.
K C PAONGA, LLB,
Acting Chief Commissioner
19. The plaintiff’s counsel, Mr Yapa, submitted that the Acting Chief Commissioner lacked the power to withdraw his own declaration without providing sound reasons for doing so. However, I consider that the authority to withdraw the declaration was amply conferred by s 35 (implied power to alter) of the Interpretation Act, which states:
Where a statutory provision confers a power to make an instrument or decision (other than a decision of a court), the power includes power, exercisable in the same manner and subject to the same conditions (if any), to alter the instrument or decision.
20. It was unnecessary for the Acting Chief Commissioner to refer to s 35 in his decision to withdraw the original declaration. He met the prerequisites for exercising the power to withdraw his own declaration as explained by Bredmeyer J in Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110, in that he withdrew the declaration in the same manner and subject to the same conditions as he made the original declaration.
21. The second reason for not declaring that the Acting Chief Commissioner’s original declaration was correct and lawful is that neither of the statutory provisions referred to in the declaration published in National Gazette G785 of 19 October 2016 appear to support the making of the published declaration. Section 42 (ownership of customary land for certain purposes) of the Land Titles Commission Act states:
(1) Subject to the Subsection 2, for the purposes of the Commission, in relation to the ownership of customary land—
(a) no account shall be taken of, or reference made to, persons other than persons living at the relevant date;
(b) living persons who, under custom, are regarded as owners of customary land shall be treated as the beneficial owners of that land by custom; and
(c) without otherwise limiting the discretion of the Commission to inquire into and determine the existence of custom relating to land, where a native exercises a customary right to exclude others from land and that right is recognized and not disputed by other natives, that fact is prima facie evidence that the land is customary land owned by that first-named native.
(2) Nothing in Subsection (1) shall operate or be taken to operate so as to defeat any customary rights which exist or may come into existence in favour of any person.
22. Section 17 (Registrar may require further description of land) of the National Land Registration Act states:
Where the Registrar [of Titles] is of the opinion that the description of the land contained in the declaration is inadequate for the purpose of properly identifying and locating the land and its boundaries, he may require the Minister to furnish a further description.
23. Neither of those provisions support the making of a declaration as to customary land ownership. With respect, those provisions are irrelevant and ineffective sources of jurisdiction.
24. For those reasons the application for a declaration regarding the correctness and legality of the Acting Chief Commissioner’s declaration published in National Gazette No G785 of 19 October 2016, is refused.
(c) A declaration that a determination under s 169 of the Oil and Gas Act by the then Minister for Petroleum and Energy, Hon Nixon Duban MP, in 2016 is valid and enforceable and supersedes similar determinations by Ministers Hon Roy Yaki MP in 2002 and Hon Sir Moi Avei MP in 2003
25. Soon after the Acting Chief Commissioner made his declaration in favour of the plaintiff in October 2016, the then Minister for Petroleum and Energy, Hon Nixon Duban MP, made the following determination under the Oil and Gas Act, also in favour of the plaintiff, published in National Gazette No G25 of 19 January 2017:
IDENTIFICATION OF LANDOWNER BENEFICIARY
WOLUTOU LAND GROUP INC
OF GOBE PETROLEUM DEVELOPMENT LICENCE No 3 AND 4 AND PNG LNG PROJECT PIPELINE No SEGMENT 6
I, the Minister for Petroleum and Energy, Hon Nixon Duban MP, by virtue of Sections 169 [sic]of the Oil and Gas Act 1998 (as amended), and all the other powers enabling me hereby make the following determination on the Gobe Petroleum Project Areas – PDL 3 and PDL 4 and the PNG LNG Project, Pipeline Licence Four (PL No 4). Segment Six (6) impacted beneficiary clans, including the Buffer Zone which are entitled to receive royalty and equity benefits.
Having received and considered the final Supreme Court SCA 101 of 2011, the Land Titles Commission Declaration Gazette No G785 dated 19th October 2016 of the Gobe Project Area by K C PAONGA LLB Acting Chief Commissioner and State Lease (SABL) Volume 17 Folio 07 and in accordance with the landowner identification studies carried under Section 47 of the Oil and Gas Act 1998, PNG LNG Umbrella Benefit Sharing Agreement (UBSA), Licence Based Benefit Sharing Agreement (LBBSA), other related submissions for the purpose of Section 169. And having considered the relevant providences of Sections 16, 17, 19 stipulated in the Land Registration Act 2009 (amended), I as Minister responsible for the implementation of the Oil and Gas Act 1998 (as amended) make the following determination.
This determination takes effect immediately.
SCHEDULE
Determination on Gobe Petroleum Project – PDL 3 and PDL 4 and PNG LNG Project Pipeline License Four (PL No. 4) Segment Six (6) including the Buffer Zone along the Pipeline right of way, as beneficiary clans and beneficiary Association of clans.
| No. | Beneficiary Clans/Groups | Percentage Allocation |
clans.
Association with its registered member
clans.
Dated this 5th day of December 2016
Hon N DUBAN MP
Minister for Petroleum and Energy
D MANAU
Director, Oil and Gas Act
D VELE
Secretary, Treasury
26. The two previous ministerial determinations, which the plaintiff claims are superseded by the above determination, were published in National Gazette No G102 of 24 June 2002 and No G64 of 13 May 2003 in the following terms:
DETERMINATION OF IDENTIFICATION OF PROJECT AREA LANDOWNERS BENEFICIARIES FOR THE SHARING OF EQUITY AND ROYALTY IN RESPECT TO THE GOBE PETROLEUM PROJECT
We, Roy Yaki, LLB, MP, Minister for Petroleum and Energy of the Independent State of Papua New Guinea, Joseph Gabut, Director for Petroleum appointed under Oil and Gas Act 1998 (as amended) and Thaddeus Kambanei, Acting Secretary for Finance, being the Departmental Head responsible for financial matters, by virtue of Section 169A of the Oil and Gas Act 1998 (as amended) and for the purposes of the Gobe Petroleum Trust declared pursuant to a Declaration of Terms by Deed Poll dated 9th November, 2001 (the Gobe Petroleum Trust) and all the powers us enabling, and having considered the relevant Court Decisions, Landowner Agreements and the Submissions, from the Government and Independent Advisers, hereby make the following determination as to the identity and entitlements of persons to receive equity and royalty benefits from the Gobe Petroleum Project.
The Incorporated Land Groups entitled to benefits from the Gobe Petroleum Project pursuant to the Oil and Gas Act 1998 (as amended) including as Project Area Landowners, Beneficiaries or Project Area Incorporated Land Groups pursuant to the Gobe Petroleum Trusts are those Incorporated Land Group set out in Column 1 of the Schedule.
Each Incorporated Land Group set out in Column 1 of the Schedule are entitled to share in the equity and royalty benefits arising from the Gobe Petroleum Project pursuant to the Gobe Petroleum Trusts in the percentages set out at Column 2 of the Schedule.
All the lawful debts of creditors and service providers must be settled by mutual consent between the Incorporated Land Groups and the creditors and service providers, or alternately the debts may be settled through the courts of law.
In respect of interest of the affected Provincial Governments, this Determination will be reviewed to provide for possible royalty and equity benefits to the said Provincial Governments at the Review of the Memorandum of Agreement between the State and the Gobe Petroleum Project Area Landowners relating to the Gobe Petroleum Project.
SCHEDULE
Gobe Project Area Landowners Entitlements
| Landowner Groups | Portions or Percentages |
01. Imawe Bogasi .... .... .... .... 34.00%
02. Luhalipu .... .... .... .... 6.00%
03. Isaweri Bupuku Gohu .... .... .... 6.50%
04. Soulwolo Hapropake .... .... .... 6.25%
05. Haukorake Tipurupeke .... .... .... .... 4.00%
06. Moloko Tipurupeke .... .... .... 4.25%
07. Asa Tipurupeke .... .... .... .... 4.00%
08. Imawe Kewa .... .... .... .... 5.00%
09. Isaweri Makof .... .... .... .... 4.00%
| TOTAL 100.00% |
Dated this 21st day of June, 2002.
Hon R YAKI, LLB, MP,
Minister for Petroleum & Energy
J GABUT,
Director, Oil and Gas Act 1998 (as amended)
T KAMBANEI,
Acting Secretary for Finance
VARIATION OF DETERMINATION OF IDENTIFICATION OF PROJECT AREA LANDOWNER BENEFICIARIES FOR THE SHARING OF EQUITY AND ROYALTY BENEFITS IN RESPECT TO THE GOBE PETROLEUM PROJECT
We, Sir Moi Avei MP, Minister for Petroleum and Energy of the Independent State of Papua New Guinea, Joseph Gabut, Director for Petroleum appointed under the Oil and Gas Act 1998 (as amended), Thaddeus Kambanei, Secretary for Finance, being the Departmental Head responsible for financial matters, by virtue of Sections 169A and 169(2) and (7) of the Oil and Gas Act 1998 (as amended) and for the purposes of the Gobe Petroleum Trusts declared pursuant to a declaration of Terms by Deed Poll dated 9th November, 2001 (the Gobe Petroleum Trusts), and all other powers us enabling, hereby make the following determinations as to the identify and entitlements of persons to receive equity and royalty benefits from the Gobe Petroleum Project.
The Determination made 21st June, 2002 published in National Gazette No G102 on 24th June, 2002 “Determination of Identification of Project Area Landowners Beneficiaries for the sharing of Equity and Royalty Benefits in respect of the Gobe Petroleum Project” is varied as follows:-
(a) by the deletion of the words “01 Imawe Bogasi 34% from the Schedule appearing in the aforesaid Determination; and
(b) the substitution therefore of the words:-
“01 Toale Hongiri 33.5
Wolutou 18.8
Yaapu Kayae 10.2
Ipipome Hongiri 4.3
Kesono 14.2
Kapisapi 8.6
Kewa 3.8
Tiasapi 3.4
Yeni Dou 3.2
(being the Incorporated Land Groups comprising the Imawe Bogasi clan)”
Dated this 8th day of May, 2003
Hon SIR M AVEI MP,
Minister for Petroleum & Energy.
J GABUT,
Director, Oil and Gas Act 1998 (as amended)
T KAMBANEI,
Secretary for Finance
27. I decline to declare that the original determination of Minister Duban is correct and lawful, because, as was the case with the Acting Chief Commissioner’s original declaration, Minister Duban’s determination was revoked soon after it was made, by the following determination published in National Gazette No G133 of 27 February 2017:
REVOCATION OF MINISTERIAL DETERMINATION
IDENTIFICATION OF LANDOWNER BENEFICIARY
REVOCATION OF DETERMINATION IN RESPECT OF WOLUTOU LAND GROUP INC OF GOBE PETROLEUM DEVELOPMENT LICENCE
NO 3 AND PNG LNG PROJECT PIPELINE NO 4 SEGMENT 6
I, the Minister for Petroleum and Energy, Hon Nixon Duban, MP, by Virtue of Section 169 of the Oil and Gas Act 1998 (as amended), and Section 35 of the Interpretation Act 1975 and all other powers enabling me revoke the declaration published in the National Gazette No G25 dated 19th January, 2017 on the
Gobe Petroleum Project Areas of PDL 3 and PDL 4 and the PNG LNG Project, Pipeline Licence Four (PL No 4), Segment Six (6) impacted
beneficiary clans, including the Buffer Zone which are entitled to receive royalty and equity benefits.
Having received and considered new information on the Status of the Gobe project related Court cases, the ongoing PNG LNG related
ADR process and having considered the decision of the Land Titles Commission published in Gazette No G816 dated 28th October 2016
of the Gobe Project Area by K C PAONGA LLB Acting Chief Commissioner and to withdraw State Lease (SABL) Volume 17 Folio 07 and having
considered the relevant technical advice, I as Minister responsible for the implementation of the Oil and Gas Act 1998 (as amended)
revoke all of the following determination published in the National Gazette No G25 dated 19th January 2017:
1. Appearing on schedule 1 are the major beneficiary clans and Association of clans for the Gobe PDL 3 and PDL 4 project areas and
the PNG LNG Project Pipelines Four (PL4) Segment Six (6), including the Pipeline Buffer Zone which are entitled to receive Royalty
and Equity.
Determination on Gobe Petroleum Project-PDL 3 and PDL 4 and PNG LNG Project Pipeline Licence Four (PL No 4) Segment Six (6) including the Buffer Zone along the Pipeline right of way, as beneficiary clans beneficiary Association of clans.
| No | Beneficiary Clans/Group | Percentage Allocation |
1 WOLUTOU CLAN with its neighbouring clans 54%
2 GOBE LEGITIMATE LANDOWNERS ASSOCIATION
With its registered member clans. 45% [sic]
This determination takes effect immediately.
Dated this 27th day of February, 2017
Hon N DUBAN MP
Minister for Petroleum and Energy
K PUIYE
Director, Oil and Gas Act
D VELE
Secretary, Treasury
28. I am satisfied that Minister Duban had the power under s 35 of the Interpretation Act to revoke his own determination. I therefore refuse the application for a declaration that Minister Duban’s original declaration is valid and enforceable and that it supersedes previous determinations by Ministers Yaki and Avei.
(d) Declarations that the actions of the Secretary for Petroleum & Energy (first defendant) and the Secretary for Finance (third defendant) regarding payment of equity and royalty benefits based on the 2003 ministerial determination are illegal and null and void
29. As I have refused the application for a declaration that Minister Duban’s original declaration is valid and enforceable and that it supersedes previous determinations by Ministers Yaki and Avei, there is no basis for a declaration that the actions of the Secretary for Petroleum & Energy and the Secretary for Finance in basing payment of the equity and royalty benefits on the 2003 determination of Minister Avei was illegal or null and void. I refuse to make the declaration sought.
(e) An order that all equity and royalty benefits due to the plaintiff in respect of the period from 1999 to 2020, plus revenue lost as a result of payments made to persons who are not true landowners be paid within 21 days
30. The making of such an order depends on the Court granting the declarations sought in earlier paragraphs of the originating summons. I have refused to make those declarations, therefore I refuse to make the order sought.
(f) An order restraining the payment of equity and royalty benefits until full determination of substantive issues by the Court
31. An order generally in the terms sought by paragraph 9 of the originating summons is worthy of consideration. As will become apparent in determination of the cross-claims, the question of customary ownership of the Gobe oilfields land is still unresolved.
Summary of determination of originating summons
32. With one exception – an injunction on payment of equity and royalty benefits sought in paragraph 9 – the relief sought in the originating summons is refused.
THE FIRST CROSS-CLAIM
33. The seventh to tenth defendants seek the following relief, as first to fourth cross-claimants, under the first cross-claim:
34. To summarise, the seventh to tenth defendants, through the first cross-claim, as first to fourth cross-claimants, are seeking:
(a) declarations that members of the plaintiff are members of Wolotou sub-clan of the Imawe Bogasi “stock clan” and that the plaintiff is one of nine “subsidiary” incorporated land groups of that “stock clan” (first cross-claim, paras 1 and 2);
(b) declarations that agreements dated 26 August 2009 and 24 July 2010 regarding customary land boundaries and related matters, to which the plaintiff was a party, are legal and binding, and an order that those agreements be given effect (first cross-claim, paras 3, 4 and 8);
(c) declarations regarding the boundaries of the plaintiff’s SABL and the SABL being superseded by orders of the National Court and the Supreme Court and the plaintiff being estopped from asserting rights and interests arising out of its SABL (first cross-claim, paras 5, 6 and 7);
(d) a declaration that payment of consultancy fees to a consultancy firm would be unlawful and void (first cross-claim, para 9);
(e) an order for payment of underpaid royalties for the period 1999 to 2003 (first cross-claim, para 10).
35. I determine those claims for relief in the following way.
(a) Declarations that members of the plaintiff are members of Wolotou sub-clan of the Imawe Bogasi “stock clan” and that the plaintiff is one of nine “subsidiary” incorporated land groups of that “stock clan”
36. Though there is evidence that members of the plaintiff are members of the Wolutou sub-clan (or clan), there is insufficient evidence of the customary or legal relationship between, on the one hand, the plaintiff and its clan members and, on the other hand, the Imawe Bogasi “stock clan”. I decline to grant the declarations sought.
(b) Declarations that agreements dated 26 August 2009 and 24 July 2010 regarding customary land boundaries and related matters, to which the plaintiff was a party, are legal and binding, and an order that those agreements be given effect
37. The cross-claimants seek declarations as to the enforceability of two mediated agreements, which appear (though it is not expressly clear from the terms of the agreements) to have been entered into as part of proceedings in the National Court in which the present plaintiff, Wolutou Incorporated Land Group, was the plaintiff: WS 1177 of 2007. The agreements are in evidence in annexures N1 and N2 of exhibit D2, the affidavit of Paul Sapake, Chairman of Toale Hongiri Incorporated Land Group (one of the tenth defendants and fourth cross-claimants). These agreements are between:
38. I decline to grant the declarations sought, for two reasons. First, to the extent that the agreements were mediated and entered into as an adjunct to WS 1177 of 2007, they exist in a legal vacuum and are unenforceable due to WS 1177 of 2007 being dismissed by order of the Supreme Court (Sawong J, Toliken J, Higgins J) in Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2016) SC2081.
39. That is a significant and illuminating Supreme Court judgment as it provides a history of the disputes over customary ownership of land that are at the heart of the present case. I digress briefly to explain that the first legal proceeding to address those disputes was the Special Land Titles Commission established in 1995 by the Head of State under s 4(3) of the Land Disputes Settlement Act. The Commission was constituted by Justice Salika, as he then was, who commenced hearing the matter on 8 May 1995 and rendered his declarations on 29 February 1996 (In the matter of the Special Land Titles Commission re a Dispute over Land Generally Known as the Gobe Main and the South-East Gobe Oil Project in the Land Region of the Gulf and Southern Highlands Provinces, 29.02.96, unreported).
40. The Yenidou Bogasi Clan was aggrieved by the decision of the Salika Commission and applied under s 34 of the Land Titles Commission Act for review. A Review Panel constituted by Chief Commissioner J Kanawi and Commissioners B Noki and C Malaisa on 20 May 2000 upheld the application for review and amongst other things declared new boundaries for the land claimed by the applicant.
41. There was then an appeal under s 38 of the Land Titles Commission Act against the decision of the Review Panel, to the National Court. Justice Sheehan upheld the appeal, finding that one of the Commissioners constituting the Review Panel exhibited actual bias against one of the appellant clans, Imawe Bogasi Clan, which bias tainted the whole proceedings of the Review Panel, which was held not to have conducted a fair and impartial hearing of the review. His Honour set aside the whole of the decision of the Review Panel and ordered that the review of the Salika Commission’s decision be “commenced again before a fresh tribunal” (In the Matter of Appeals by Imawe Bogasi, Isewari Bupuku Gohu, Haporopake & Sumbala Clans, CA Nos 111, 134 and 190 of 2000, 04.12.00, unreported).
42. The fresh review ordered by Justice Sheehan appears never to have eventuated. Instead the disputes took a different turn in 2000 when the Luhalipu Clan and other clans commenced proceedings in the National Court, seeking declarations that they be identified as the “Gobe Project Area Landowners”. Those proceedings were heard by Justice Kandakasi, as he then was, who held, amongst other things, in Soso Tomu for Luhalipu Clan & Ors v The State & Ors [2002] PNGLR 250, that:
Since the equity and royalty grants are to landowners or persons having interest in a petroleum project area land, any ownership dispute over such land has the effect of preventing the distribution of such grants until the dispute has been resolved either by agreement of the parties or as may be determined by the LTC [Land Titles Commission] or the LLC [Local Land Court] as the case may be.
43. The effect of that decision, delivered on 28 February 2002, which was not overturned by the Supreme Court, was to reinforce the principle that final determination of the beneficiaries of all equity and royalty benefits for the Gobe project could only be made after resolution of the question of customary land ownership by the Land Titles Commission.
44. The determinations of benefits by Ministers Yaki (2002) and Avei (2003) were only interim determinations, resulting from a benefit sharing agreement called the “Lae Inter Agreement”.
45. While the question of customary land ownership remained unresolved, the present plaintiff, Wolutou Incorporated Land Group, commenced WS 1177 of 2007 in the National Court, naming the State and the Chief Commissioner of the Land Titles Commission, amongst others, as defendants.
46. WS 1177 of 2007 was conducted by Justice Kandakasi who referred the proceedings to mediation pursuant to the National Court Act and appointed himself as mediator.
47. It appears (however, I again stress that the terms of the agreements do not make this clear) that the agreements of 26 August 2009 and 24 July 2010 – which the cross-claimants are seeking to enforce – were entered into under the auspices of WS 1177 of 2007. Those proceedings were resolved by a consent order entered by order of Justice Kandakasi on 24 August 2011.
48. However, the consent order was the subject of an appeal to the Supreme Court, SCA 101 of 2011, lodged by one of the present cross-claimants, Toale Hongiri Incorporated Land Group and other ILGs .
49. An objection to the competency of the appeal was dismissed by the Supreme Court (Cannings J, Sawong J, Collier J) in 2012 (Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2012) SC1201).
50. Then the appeal was upheld by the Supreme Court (Sawong J, Toliken J, Higgins J) in 2016 (Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2016) SC2081). The Supreme Court held that the National Court erred in entering the consent orders of 24 August 2011 as not all of the parties to the proceedings had given their consent to such orders, which had resulted from a mediation that included groups who were not parties in WS 1177 of 2007. The Supreme Court held that the purported consent orders were not, in fact or law, consent orders.
51. Furthermore, the Supreme Court held that the National Court lacked original jurisdiction to deal with WS 1177 of 2007 as the proceedings involved interests in customary land. Significantly, the Supreme Court ordered, amongst other things:
3 Proceedings WS 1177 of 2007 are dismissed in their entirety for want of jurisdiction.
4 It is directed that these disputes over Gobe Lands be returned to the Land Titles Commission for resolution unless the Head of State declares otherwise.
52. As WS 1177 of 2007 was dismissed, by order of the Supreme Court, it follows that all agreements entered into as an adjunct to WS 1177 of 2007, are unenforceable. Therefore the agreements of 26 August 2009 and 24 July 2010, which the cross-claimants are trying to enforce, cannot be declared binding. That is the first reason I refuse the application for the declarations sought in paragraphs 3 and 4 of the first cross-claim.
53. The second reason for refusing the declarations is that – even if I am wrong in the view that the two agreements were an adjunct to WS 1177 of 2007 or that the agreements are unenforceable due to the dismissal of WS 1177 of 2007 – Wolutou Incorporated Land Group is not named as a party to those agreements, and it would serve no purpose to grant general declarations in the terms sought without there being a real controversy between the actual parties to those agreements as to their enforceability (The State v Central Provincial Government (2009) SC977, Pundi v Rupen (2015) SC1430).
54. I therefore refuse to grant the declarations sought in paragraphs 3, 4 and 8 of the first cross-claim.
(c) Declarations regarding the boundaries of the plaintiff’s SABL and the SABL being superseded by orders of the National Court and the Supreme Court and the plaintiff being estopped from asserting rights and interests arising out of its SABL
55. I refuse to make any of the declarations sought in paragraphs 5, 6 or 7 of the first cross-claim for the following reasons:
56. First, the National Court has no jurisdiction to declare that the boundaries of a SABL do or do not extend into an area of customary land. Such questions are, as confirmed in numerous decisions of the Supreme Court and the National Court, within the exclusive jurisdiction of the Land Titles Commission under s 15(1) (determination of disputes) of the Land Titles Commission Act, which states:
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 may make all such preliminary inquiries and investigations as it deems necessary for the purpose of hearing and determining the disputes and claims.
See, for example, 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 Simion Nusai (1995) N1375; Ronny Wabia v BP Exploration Co Ltd [1998] PNGLR 8; Lavu v Thompson & NBPOL (2007) N5018.
57. Secondly, it is fallacious to assert that the plaintiff’s SABL has been, or can, be “superseded” by the decision of any Court; unless, of course, there is a decision of the National Court or the Supreme Court that expressly declares or orders the nullification of the SABL or by some other formal means, prevents enforceability of the SABL. However, no such declaration or order has been made in either of the Court proceedings referred to in paragraph 6 of the first cross-claim, WS 1177 of 2007 (which has been dismissed by order of the Supreme Court) or SCA 101 of 2011 (which did not mention the SABL at all).
58. Thirdly, it is also fallacious to assert that an estoppel can be raised against the plaintiff, to prevent it from asserting its rights and interests arising out of its SABL due to its failure to produce its title to the National Court in WS 1177 of 2007 or to the Supreme Court in SCA 101 of 2011. As I said earlier when refusing the plaintiff’s application for a declaration as to the legality of its SABL, the plaintiff is the registered proprietor of the SABL. It has a bundle of interests in the land covered by the SABL by virtue of being the registered proprietor. It has an indefeasible title, subject only to the exceptions in s 33(1) (protection of registered proprietor) of the Land Registration Act, including s 33(1)(a), which states: “The registered proprietor of an estate or interest holds it absolutely free from all encumbrances except ... in the case of fraud”. “Fraud” means actual fraud or constructive fraud. Constructive fraud exists where the circumstances of transfer of title are so unsatisfactory, irregular or unlawful, it is tantamount to fraud, warranting the setting aside of registration of title (Emas Estate Development Pty Ltd v John Mea [1993] PNGLR 215, PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126, Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120 and Kol Toki v Moeka Morea (2016) SC1588). Its title cannot be enhanced or diminished by its conduct in court proceedings. It was not appropriate to declare that it was lawfully granted the SABL. Nor would it be appropriate to declare that the plaintiff is estopped from relying on the SABL because of the way it has conducted itself in court proceedings.
(d) A declaration that payment of consultancy fees to a consultancy firm would be unlawful and void.
59. I refuse to grant such a declaration for the simple reason that the firm that would be affected by the declaration is not a party to these proceedings.
(e) An order for payment of underpaid royalties for the period 1999 to 2003
60. Such an order cannot be made without there being a formal determination of customary land ownership. I refuse to make such an order.
Summary of determination of first cross-claim
61. All the relief sought in the first cross-claim is refused.
THE SECOND CROSS-CLAIM
62. The seventh to tenth defendants seek the following relief, as first to fourth cross-claimants, under the second cross-claim:
63. To summarise, the seventh to tenth defendants, through the second cross-claim, as first to fourth cross-claimants, are seeking:
(a) a declaration that Minister Avei’s determination of May 2003 be used as the basis for payment to the cross-claimants of outstanding royalty benefits (second cross-claim, paras 1 and 3);
(b) a declaration that payment of consultancy fees to a consultancy firm would be unlawful and void (second cross-claim, para 2);
(c) a declaration that the plaintiff’s SABL has been superseded by orders of the National Court in WS 1177 of 2007 and the Supreme Court in SCA 101 of 2011 and that plaintiff is estopped from asserting rights and interests arising out of its SABL (second cross-claim, paras 4 and 5);
(d) an order that the governmental defendants give effect to order 4 of the Supreme Court in SCA 101 of 2011 (second cross-claim, para 6);
(e) an order reinstating OS (JR) 778 of 2016 (second cross-claim, para 7).
64. I determine those claims for relief in the following way.
(a) Declaration that Minister Avei’s determination of May 2003 be used as the basis for payment to the cross-claimants of outstanding royalty benefits
Such a declaration cannot be made without there being a formal determination of land ownership. I refuse to make the declaration sought.
(b) Declaration that payment of consultancy fees to a consultancy firm would be unlawful and void
This is a rehash of the relief sought by paragraph 9 of the first cross-claim, which I refused to grant. I refuse to make the declaration sought.
(c) Declarations that the plaintiff’s SABL has been superseded by orders of the National Court in WS 1177 of 2007 and the Supreme Court in SCA 101 of 2011 and that the plaintiff is estopped from asserting rights and interests arising out of its SABL
This is a rehash of the relief sought by paragraphs 6 and 7 of the first cross-claim, which I refused to grant. I refuse to make the declarations sought.
(d) Order that the governmental defendants give effect to order 4 of the Supreme Court in SCA 101 of 2011
This is an appropriate and sensible claim for relief. It is apparent that order 4 of the Supreme Court in SCA 101 of 2011 has not been given effect. Order 4 was:
It is directed that these disputes over Gobe Lands be returned to the Land Titles Commission for resolution unless the Head of State declares otherwise.
65. The Acting Chief Commissioner of the Land Titles Commission made an attempt to give effect to that order by his original declaration published in National Gazette No G785 of 19 October 2016, but it was withdrawn soon after it was made, by the declaration published in National Gazette No G816 of 28 October 2016.
66. It seems that the parties to the present proceedings, especially the governmental defendants, have failed to appreciate the import of the Supreme Court decision in SCA 101 of 2011. In fact, there has been a continuing failure on the part of all parties for more than 20 years, since Justice Sheehan’s decision in December 2000 in In the Matter of Appeals by Imawe Bogasi, Isewari Bupuku Gohu, Haporopake & Sumbala Clans, CA Nos 111, 134 and 190 of 2000, 04.12.00, unreported, to appreciate the importance of resolving the question of customary land ownership before making determinations of what equity and royalty benefits are payable to whom and in what proportions.
67. I will make an order generally in the terms sought by paragraph 7 of the second cross-claim.
(e) Order reinstating OS (JR) 778 of 2016
68. I am unable to see the relevance of those old judicial review proceedings to this case. This is a misconceived application for relief and it is refused.
Summary of determination of second cross-claim
69. With one exception – an order to give effect to the order of the Supreme Court in SCA 101 of 2011 – the relief sought in the second cross-claim is refused.
CONCLUSION
70. I have dismissed most of the plaintiff’s claims for relief and most of the cross-claimants’ claims for relief. The question of customary land ownership needs to be resolved, by exhaustion of the processes provided for by the Land Titles Commission Act and the Land Disputes Settlement Act, before making determinations of what equity and royalty benefits are payable to whom and in what proportions. That is the fundamental principle that ought to guide the parties and the Court in resolving these disputes.
71. The parties will bear their own costs as none has substantially succeeded and the plaintiff and the cross-claimants bear equal responsibility for prosecuting an array of misconceived applications.
72. I will order that the Chief Commissioner of the Land Titles Commission play an important role in resolving this matter. I will order that the Solicitor-General be involved too. He also has an important role.
ORDER
(1) Subject to this order, the relief sought in the originating summons is refused.
(2) Subject to this order, the relief sought in both cross-claims is refused.
(3) The Registrar of the National Court shall forthwith cause personal service of this judgment and order on:
(a) the fourth defendant & fifth cross-defendant, who shall comply strictly with this order; and
(b) the Solicitor-General, who shall, until further order of the Court or until any of the parties provide contrary instructions, be deemed to represent the first to sixth defendants and second to seventh cross-defendants, and shall provide counsel to appear for those parties in these proceedings, so that the Court may be assisted in resolving these proceedings as soon as is practicable.
(4) The fourth defendant & fifth cross-defendant shall take all steps necessary to resolve the question of customary ownership of the land in the adjudication area of the Salika Special Land Titles Commission regarding the Gobe oilfields in Gulf and Southern Highlands Provinces, in accordance with order 4 of the Supreme Court of 27 September 2016 in Toale Hongiri Incorporated Land Group & Ors v Wolutou Incorporated Land Group & Ors (2006) SC2081, by 7 July 2021.
(5) The fourth defendant & fifth cross-defendant shall by 20 April 2021 file in these proceedings an affidavit deposing in detail to the steps proposed to be taken to comply with order (4).
(6) The Registrar shall immediately after filing of the affidavit referred to in order (5), serve the affidavit by email on the parties who have provided an address for service in these proceedings.
(7) The fourth defendant shall appear before the Court on 27 April 2021 at 3.30 pm to confirm the details of the affidavit referred to in order (5), and that date and time shall be the return date for any notice of motion filed by any of the parties in the interim.
(8) The first to sixth defendants & second to seventh cross-defendants are, until further order of the Court, restrained forthwith from making or facilitating any equity or royalty benefits under ss 167, 168 or 169 of the Oil and Gas Act to any person including any of the parties to these proceedings in respect of the customary ownership of the land in the adjudication area of the Salika Special Land Titles Commission regarding the Gobe oilfields in Gulf and Southern Highlands Provinces.
(9) The requirements of service are dispensed with to the extent that all parties with an address for service that includes an email address may serve any other parties who have provided an address for service that includes an email address, any document, by email.
(10) The question of costs of the proceedings is adjourned for consideration at the conclusion of the proceedings.
Ordered accordingly.
________________________________________________________________
Nandi Lawyers: Lawyers for the Plaintiff & First Cross-Defendant
Haiara’s Legal Practice: Lawyers for the Seventh to Tenth Defendants & First to Fourth Cross-Claimants
Wantok Legal Group: Lawyers for the Eleventh & Twelfth Defendants
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