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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS NO. 275 OF 2022
BETWEEN:
JACK GAHE
Plaintiff
AND:
TELIKOM (PNG) LIMITED
Defendant
Goroka: Mugugia, AJ
2023: 21st March, 19th April
PRACTICE AND PROCEDURE – Defendant’s motion to dismiss proceedings – Dismissal of proceedings for disclosing no reasonable cause of action, being frivolous or vexatious being an abuse of process, for being time-barred and for lack of representative capacity - Whether the proceedings should be dismissed based on the grounds raised - Exercise of discretion - Application refused.
Cases Cited:
PNG Forest Products Pty. Ltd. and Another v. The State and Genia [1992] PNGLR 85
Mumun v. RD Tuna Canners Ltd. (2005) N2827
Counsel:
Karen Lafanama, for the Plaintiff
Christopher Karaiye, for the Defendant
RULING ON APPLICATION TO DISMISS PROCEEDINGS
19th April, 2023
1. MUGUGIA, AJ: Two motions were listed for hearing before me on 21st March 2023. The Plaintiff’s Notice of Motion filed on 15th November 2022, and the Defendant’s Notice of Motion filed on 6th February 2023, seeking dismissal of the proceedings. Leave was granted to the Plaintiff to withdraw his motion. I heard the Defendant’s application which was contested by the Plaintiff’s Counsel. This is my ruling on this application.
FACTUAL BACKGROUND
2. The substantive matter concerns Mt. Otto where Telikom has its tower, and the land use and other payments by Telikom (PNG) Limited and other benefits derived therefrom. The facts as gathered from the documents before me are that a Mediated Agreement dated 23rd October 2016 was reached between the parties involved in two National Court proceedings referenced as OS No. 128 of 2011, Jack Gahe for and on behalf of Sehayufa Clan of Kotuni Village v. Telikom PNG Limited, Veho Mohokule, James Aitapo & Seth Huke, and WS No. 1657 of 2011, Jack Gahe & Peter Kovani v. Digicel PNG Limited, James Aitapo & Veho Mohokule. The family groupings within the Sehazuha Clan, Goroka District, Eastern Highlands Province were also parties to this Mediated Agreement. The landowner parties were claiming ownership and other rights and interests over land described as “Mt Otto Repeater Station Land”.
3. The National Court ordered the proceedings to be resolved by mediation. A mediation process was conducted by His Honour Justice Kandakasi (as he then was), and his Co-mediator Justice Salika (as he then was). The landowners agreed to resolve their disputes and record their agreement in the terms of the Mediated Agreement. What came out of this mediation process was the Mediated Agreement dated 23rd October 2016. Kandakasi J (as he then was) certified that the parties had resolved all of the issues in dispute, and will discontinue the proceedings.
4. Through the mediation process, the landowners reached agreement on the distribution of benefits mechanism. Under Term 4.1 of the Mediated Agreement, the parties agreed that Jack Gahekave will have hundred percent (100%) of the total of all payments and or benefits derived from Telikom (PNG) Limited which he shall share with the family line of Makarai.
5. The Department of Lands and Physical Planning made a part payment of K130,000.00 to the Plaintiff on 26th June 2016. The Defendant was required to pay the Plaintiff the balance of K754,000.00. No payment was made by the Defendant, and the Plaintiff commenced the current proceedings by originating summons pursuant to Order 4, Rule 3 of the National Court Rules on 7th November 2022, asking the Court to declare that the Mediated Agreement dated 23rd October 2016 is authentic, genuine and enforceable, and the Plaintiff is authorized by parties pursuant to paragraph 4(4.1)(a) ‘Distribution of Benefits Mechanism’ that he will have hundred percent (100%) of the total of all payments and or benefits derived from the Defendant which he shall share with the family line of Makarai. The Plaintiff also seeks an order for the Defendant to pay the balance of K750,000.00.
DEFENDANT’S CASE IN SUPPORT OF THE APPLICATION
6. In making the application for dismissal, Mr Karaiye of Counsel for the Defendant relied on the Affidavit of Amos Tepi filed on 6th February 2023. Counsel also relied on the Defendant’s Submissions filed on the same date.
7. The Defendant seeks dismissal of the proceedings pursuant to Order 12, Rule 40(1)(a), (b) and (c) of the National Court Rules. The grounds raised are:
(i) The Plaintiff failed to exhaust the mediation and settlement process prescribed under Clause 8 of the Mediated Agreement dated 23rd October 2016, prior to instituting the current suit against the Defendant.
The Defendant’s submission is that Clause 8.1 of the Mediated Agreement states that any litigation must be pursued after the settlement proposal and mediation options are exhausted. The Plaintiff filed this proceedings without exhausting or fulfilling the mandatory preliminary requirements. The Plaintiff has prematurely come to court.
(ii) The Plaintiff does not have locus standi because there was no clan resolution authorising him to issue the current action against the Defendant. What the Plaintiff did was not in accordance with Clause 7.3 of the Mediated Agreement.
The Defendant’s submission is that the Plaintiff failed to secure the clan resolution authorizing him to issue the proceedings in accordance with Clause 7.3 of the Mediated Agreement.
(iii) This Court lacks the jurisdiction to entertain the Plaintiff’s settlement payment of K884,000.00 (as assessed by the Valuer General). The National Lands Commission is vested with the jurisdiction pursuant to the National Land Registration Act.
The Defendant’s submission is that it legally owns the subject land. The land was and is not a customary land as per se. Any payment that the Defendant would have made was to the State through the Department of Lands and Physical Planning. Similarly, the payment for land acquisition is the responsibility of the Lands Department under the Land Act 1996. The State is fully responsible for any land acquisition payment and not the Defendant. The right party to pay is the Lands Department. This proceedings filed against the Defendant is therefore an abuse of process.
The Defendant further submitted that the assessment of settlement payment in the sum of K884,000.00 by the Valuer General’s
Office was improper and illegal. The Plaintiff’s reliance on such assessment is illegal.
.
(iv) The Plaintiff is suing a non-existent company namely Telikom (PNG) Limited. This is contrary to Sections 16 and 17 of the Companies Act. The correct entity is Telikom Limited.
Reference was made to Pacific Rim Constructors - Singapore PTE Ltd. v. Huala Hire & Construction Ltd. (2012) N4710. The Defendant’s submission is that in the current proceedings, the Plaintiff is suing the Defendant company which is non-existent. The Defendant changed its name and it does not trade under the name labelled in the proceedings. The proper and correct naming of the company in any action including this proceedings is mandatory in the collective terms of sections 16 and 17 of the Companies Act. In the present case, the Defendant is a non-existent company, and it is an abuse of process.
(v) Alternatively, the proceedings is time-barred pursuant to Section 16 of the Frauds and Limitations Act.
The Defendant’s submission is that the proceeding is statute-barred pursuant to Section 16 of the Frauds and Limitations Act. That is, the Mediated Agreement was entered on 23rd October 2016, and the current proceedings was filed on 7th November 2022 after six (6) years, one (1) month.
8. Also raised as a ground for dismissal is that the proceedings offends the requirements of Order 5, Rules 3, 8 and 13 of the National Court Rules, and is incompetent. The Plaintiff lacks standing as he had failed to obtain express written consent of the individual members of the family line of the concerned clans, and the Public Solicitor lacked standing to represent the Plaintiff as there was no express written consent given by the individual members appointing him as the lawyer for the family or clan. The proceedings should therefore be dismissed pursuant to Order 12, Rule 40(1)(a) and (c) of the National Court Rules for disclosing no reasonable cause of action and for abuse of process. Reference was made to past cases including Mali v. State (2002) SC690 and Malayeki v. Utin (2019) N8040.
PLAINTIFF’S SUBMISSIONS OPPOSING THE APPLICATION
9. In opposing the Defendant’s application, reliance was placed on the Plaintiff’s affidavits filed on 9th December 2022 and 27th February 2023 respectively. An extract of submissions was provided to the Court by Ms Lafanama of Counsel for the Plaintiff.
10. On whether or not the Plaintiff has a reasonable cause of action, the submission is that the Plaintiff has a cause of action seeking enforcement orders for payment of K754,000.00. There is no issue in regards to dispute over land ownership or interest. Valuation was done and payment must follow.
11. On the issue of locus standi, the submission is that in Siu v. Wasime Land Group Incorporated (2011)SC1107, the Court stated that “the person or persons who are declared as the customary owners of this land will have the ultimate control over how financial and other monetary benefits are to be distributed.” In the present case, the Mediated Agreement gives the Plaintiff standing on behalf of his clan. As per the Mediated Agreement, 100% shares will be directed to him for his family line. The submission is that the Plaintiff has legal standing to institute the current proceedings on behalf of himself and the family line of Makarai as per the Mediated Agreement.
12. The Plaintiff contended that the proceedings is neither frivolous nor vexatious.
13. On whether or not Telikom (PNG) Limited is correctly named as a defendant, the submission is that if the Defendant is not correctly named, the Plaintiff’s case should not be dismissed. It is a matter of amending and styling the named defendant correctly as registered under the Investment Promotion Authority.
14. On whether or not the claim is time-barred, the Plaintiff’s submission is that the claim is not time-barred. Section 16(1)(c) of the Frauds and Limitations Act 1988 provides an exception to the time limitation. The Mediated Agreement is a sealed instrument and thus cannot be subjected to the application of the Section 16 time limitation.
15. The Plaintiff asks the Court to stay proceedings and allow him to pursue his application to amend proceedings.
ISSUES
16. The issues arising from the Defendant’s motion are:
(1) Whether the proceedings fails to disclose a reasonable cause of action, is frivolous or vexatious and is an abuse of the process of the Court, and therefore, should be dismissed under Order 12, Rule 40(1)(a), (b) and (c) of the National Court Rules; and
(2) Whether the proceedings offends the requirements of Order 5, Rules 3, 8 and 13 of the National Court Rules, rendering it incompetent, and therefore should be dismissed pursuant to Order 12, Rule 40(1)(a) and (c) of the National Court Rules.
THE LAW
17. Rule 40 of Order 12 of the National Court Rules provides for ‘Frivolity, etc.’. Rules 40(1)(a), 40(1)(b) and 40(1)(c) read:
“(1) Where in any proceedings it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings –
(a) no reasonable cause of action is disclosed; or
(b) the proceedings are frivolous or vexatious; or
(c) the proceedings are an abuse of the process of the Court,
the Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.”
18. The purpose of Order 12, Rule 40 of the National Court Rules is to give the Court power to terminate actions or claims where no reasonable cause of action is disclosed, actions or claims which are plainly frivolous or vexatious or untenable. An action or claim is bound to be terminated if it amounts to an abuse of the process of the Court. The power conferred on the National Court to dismiss is discretionary and must be exercised based on proper principles.
CONSIDERATION
Issue 1: Whether the proceedings fails to disclose a reasonable cause of action, is frivolous or vexatious and is an abuse of the process of the Court, and therefore, should be dismissed under Order 12, Rule 40(1)(a), (b) and (c) of the National Court Rule
19. After considering the affidavit materials before me, and hearing Counsels’ submissions, I make these findings:
(i) Term 8 of the Mediated Agreement provides for ‘Disputes’. Term 8.1 provides the step-by-step process on how to deal with any dispute or difference or argument which arises as to the meaning and effect of any term or provision of the Mediated Agreement. I find that Term 8 of the Mediated Agreement does not apply in this case because the dispute between the Plaintiff and the Defendant does not arise as to the meaning and effect of any term or provision of the Mediated Agreement. The plaintiff is seeking declaratory orders, and the dispute relates to the land use and other payments by Telikom (PNG) Limited and other benefits derived therefrom.
(ii) Clause 7 of the Mediated Agreement provides for ‘General Effect of this Agreement’. I find that Term 7.1 of the Mediated Agreement is not applicable in this case. The reason I say this is because the Mediated Agreement concerns issues by the landowners themselves in relation to claims of ownership and other rights and interest as the basis to receive benefits from the use of the land by the Telecommunication companies. The Plaintiff’s action is against Telikom (PNG) Limited, not against any other landowner(s) for Term 7.1 to apply.
(iii) The Defendant’s tower is on the Plaintiff’s land. The subject land is now State Land. Mediation settled all the issues. Term 4.1 of the Mediated Agreement says that the Plaintiff will have 100% of all payments and or benefits derived from Telikom (PNG) Limited which he shall share with the family line of Makarai. I find that the Plaintiff is in the correct forum to ask this Court to make the declarations. It is just a matter of the Defendant paying the outstanding.
(iv) I find that it is possible for the Plaintiff to amend the pleadings under Order 8, Rule 50(1) of the National Court Rules to change the name of the Defendant to the correct name. Dismissal of the proceedings at this interlocutory stage will prejudice the Plaintiff.
(v) I find that the proceedings is not time-barred pursuant to Section 16 of the Frauds and Limitations Act 1988. Section 16(1) does not apply to the Plaintiff’s action.
(vi) I remind myself that the procedure for summary disposal should be confined to cases where the cause of action is obviously and
incontestably bad. The plaintiff should not be driven from the judgment seat unless the case is unarguable: PNG Forest Products Pty. Ltd. and Another v. The State and Genia [1992] PNGLR 85.
The Plaintiff is applying for declarations of rights under Order 4, Rule 2(3)(a) of the National Court Rules. Having considered the materials before me and having heard Counsels’ submissions, I find that there is merit in the substantive matter, and the Plaintiff has a reasonable cause of action. I find that the substantive proceedings are not frivolous or vexatious. I also find that the proceedings is not an abuse of the process of the Court. The proceedings should not be dismissed at this interlocutory stage. It should proceed to substantive hearing.
(vii) The Court stated in Siu v. Wasime Land Group Incorporated (2011)SC1107 that “the person or persons who are declared as the customary owners of this land will have the ultimate control over how financial and other monetary benefits are to be distributed.” The Plaintiff is the declared landowner. Term 4.1 of the Mediated Agreement says that the Plaintiff will have 100% of all payments and or benefits derived from Telikom (PNG) Limited which he shall share with the family line of Makarai. So, why is the Defendant raising lack of standing? I find that the Plaintiff has standing to institute this proceedings.
Issue 2: Whether the proceedings offends the requirements of Order 5, Rules 3, 8 and 13 of the National Court Rules, rendering it incompetent, and therefore should be dismissed pursuant to Order 12, Rule 40(1)(a) and (c) of the National Court Rules.
20. I note that the Plaintiff is named in his personal capacity. Term 2.1 of the Mediated Agreement states that the landowners recognize, welcome and accept the decision of the Provincial Land Court vesting ownership of the land in Jack Gahekave and his Sehazuha Clan. Through the mediation process, the landowners reached agreement on the distribution mechanism set out in Term 4 of the Mediated Agreement (Term 1.2). Term 4.1 of the Mediated Agreement says that the Plaintiff will have 100% of all payments and or benefits derived from Telikom (PNG) Limited which he shall share with the family line of Makarai.
21. I find that the proceedings are not incompetent. A reasonable cause of action is disclosed and there is no abuse of process.
22. I make reference to Mumun v. RD Tuna Canners Ltd (2005) N2827, where Manuhu AJ (as he then was) stated that “The Plaintiff has the "same interest" as every other members of Sasagas Clan. The other members of the clan, as mandated by the National Court Rules, do not have to be named”. I remind myself to consider the overall requirement to do justice in this case. Considering the circumstances, I will exercise my discretion under Order 5, Rule 13(1) of the National Curt Rules to allow the Plaintiff Jack Gahe to pursue the matter in his name.
23. Under Order 12, Rule 1 of the National Court Rules (General relief), the Court may, at any stage of any proceedings, on the application of any party, direct the entry of such judgement or make such order as the nature of the case requires, notwithstanding that the applicant does not make a claim for relief extending to that judgement or order in any originating process.
24. I will not dismiss the proceedings based on the grounds raised in the Defendant’s motion. I shall refuse the Defendant’s application to dismiss the proceedings pursuant to Order 12, Rule 1 of the National Court Rules. An order for costs is discretionary. I order that the Defendant shall pay the Plaintiff’s costs.
FORMAL COURT ORDERS
25. In the exercise of my discretion, I make these Orders:
1. The Defendant’s Notice of Motion filed on 6th February 2023 is refused.
2. The Defendant shall pay the Plaintiff’s costs, which are to be taxed if not agreed.
3. Time is abridged to the time of settlement to take place forthwith.
Court Orders Accordingly.
________________________________________________________________
Public Solicitors Office: Lawyers for the Plaintiff
Telikom PNG Ltd Inhouse Lawyers: Lawyers for the Defendant
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URL: http://www.paclii.org/pg/cases/PGNC/2023/160.html