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National Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 1467 OF 2019 (COMM)
NASON KIALA
Plaintiff
V
MARTIN KOHUAN PARAKAI
First Defendant/First Cross Defendant
AND
AVENELL ENGINEERING SYSTEM LIMITED
Second Defendant/Cross Claimant
Waigani: Anis J
2023: 16th &19th May
2024: 31st July
CLAIM PREMISED ON CONTRACT TO SEEK ENVIRONMENTAL DAMAGE – Cause of action questioned – whether plaintiff has standing – whether cause of action properly formulated in the statement of claim –whether plaintiff has right to claim damages against third party over activities on land that occurred prior to him acquiring legal title - consideration and ruling
Cases Cited:
Papua New Guinean Cases
Papua New Guinea Banking Corporation v Amevo and Bari Investments [1998] PNGLR 240
Maoko v Ling [2008] N3293 at [6]-[10]
Stephen Asivo v. Maigari Ltd and 1 Or (2020) N8330
Clinton Capital Partners Pty Ltd v. Kumul Petroleum Holdings Ltd (2020) N8669
Unung-Sigite Ltd v. Gilford Ltd (2024) SC2586
Mase v Gab (2021) N8714 at [20]
Toligai v Sir Julius Chan & Anor (2012) N4842 at [5]-[6]
Christian Life Centre v Associated Mission Churches of PNG & Ors (2002) N2261
Mudge v The Secretary for Lands [1985] PNGLR 387
Timothy v Timothy (2022) SC2282
Emmas Estate Development Pty Ltd v. John Mea & Ors [1993] PNGLR 215 (majority view applied)
Steamships Trading Company Limited v. Minister for Lands & Physical Planning, Garamut Enterprises Limited & Ors (2000) N1959
Gawi v PNG Ready Mixed Concrete Pty Ltd [1984] PNGLR 74
Lilian Angai and Ors v. Gemini Holdings Ltd (2024) SC2543
China Habour Engineering Company (PNG) Ltd v. Buni Morua (2023) SC2436
PNG Forest Products and Inchcape Berhad v The State and Genia, Minister for Forests [1992] PNGLR 85
Takori v Yagari (2007) SC905
Philp Lahek and Ors v. Sali Tagau and 1 Or (2024) N10678
Overseas Cases
Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1; (1915) AC 847
Counsel:
M Koimo, for the Plaintiff
S Nutley with S Gigmai, for the Second Defendant
JUDGMENT
31st July, 2024
1. ANIS J: This was a hearing of a claim for alleged environmental damage. The only parties who were present at the hearing and who were heard were the plaintiff and the second defendant. The claim and cross-claims that were made against the second and third cross-defendants were discarded prior to the trial. The first defendant did not show any interest in the matter from the beginning and thus was absent at the hearing.
2. The trial was conducted on 16 May 2023. Closing submissions were presented on 19 May 2023. I reserved my decision thereafter to a date to be advised.
3. This is my ruling.
BACKGROUND
4. The dispute which led the plaintiff to file this proceeding concerns a commercial arrangement between the second defendant, the first defendant, and 2 other cross-defendants. As stated, the 2 cross-defendants have since been removed from the proceeding, namely, James Parakai and Thomas Parakai (2 cross-defendants). The agreement was called Quarry Lease Agreement, and it was entered on 24 March 2014 (QLA). The agreement was later varied on 13 May 2014 (Variation Agreement). Under the QLA, the second defendant, (i), was permitted to enter onto an agricultural lease which is described as Portion 143, Kelaua, Los Negros, Manus Province (Portion 143/State Lease), (ii), excavate and extract gravel on the land for its business purpose (for work associated with the construction of the Manus Asylum Seekers Processing Centre), and (iii), pay a royalty fee per month for the extracted gravel.
5. The plaintiff, in this proceeding, is claiming that he is the registered proprietor of Portion 143 and that he was not a party to the QLA nor the Variation Agreement. He also challenges the validity of these agreements. However, the plaintiff also relies on the terms and conditions of these agreements to argue that the second defendant breached them, and as a result, that he has suffered environmental damage caused to his land.
6. The second defendant denies the allegations.
EVIDENCE
7. The parties tendered evidence which were given exhibit numbers. The second defendant also called its sole witness Dominic Avenell, who had given written evidence, to also give oral testimony. Mr. Avenell was subjected to cross-examination by the plaintiff.
PRELIMINARY ISSUES
8. The second defendant raises preliminary issues, that is, issues that were raised in the pleadings including questions concerning cause of action and standing. I will deal with them first before I address the substantive matter.
CAUSE OF ACTION/STANDING
9. I must say at the outset that it is quite difficult to understand the plaintiff’s cause of action as pleaded in the Writ of Summons and Statement of Claim filed 15 November 2019 (SoC).
10. The second defendant’s counsel, Mr. Nutley in closing, was convinced, premised on the plaintiff’s own submission, that the cause of action was for trespass. However, counsel submitted that despite his view, he acknowledged the plaintiff’s formal position of what his cause of action was, which was an action premised on breach of the terms and conditions of the QLA and the Variation Agreement. I note that I also queried the plaintiff’s counsel Mr. Koimo, on whether his client’s cause of action was in trespass. In response, counsel confirmed on record that the plaintiff’s cause of action was not for trespass, but rather, was for breach of the various terms and conditions under the 2 agreements whereupon which had caused environmental damage over his land.
11. I note the submissions of the parties on this preliminary issue. I have also reviewed the SoC. But perhaps better clarity may be noted at the opening of closing submissions by Mr. Koimo. Counsel submits that the claim for environmental damage arose out of a contract, referring to the QLA, that had been entered between the first defendant and the second defendant.
12. So, the plaintiff is essentially saying, which also appears to be pleaded in his SoC, that as the registered proprietor of Portion 143, the first and second defendants including the other 2 cross-defendants, did not seek his permission to enter Portion 143 and conduct excavation and extraction of quarry materials. As a result, he claims that he suffered environmental damage caused to his land.
13. Let me make this observation and finding. Without claiming trespass, the cause of action appears to allege breach of contract, and if that is the case, then I find it to be frivolous and baseless, for the reason that the plaintiff is not privy to the QLA and the Variation Agreement: Papua New Guinea Banking Corporation v Amevo and Bari Investments [1998] PNGLR 240, Christian Life Centre v Associated Mission Churches of PNG & Others (2002) N2261, Maoko v Ling [2008] N3293 and Stephen Asivo v. Maigari Ltd and 1 Or (2020) N8330. These cases, amongst others, have approved the doctrine, Privity of Contract; that only the parties to a contract may sue or be sued under it. I note that the SoC does not set out the exceptions to the doctrine where the plaintiff may rely on nor were there any submissions made in that regard: Clinton Capital Partners Pty Ltd v. Kumul Petroleum Holdings Ltd (2020) N8669.
14. Given the above finding, it also appears clear that the plaintiff has no right or business whatsoever to challenge the validity, breach, and enforcement of the 2 contracts: Unung-Sigite Ltd v. Gilford Ltd (2024) SC2586, Dunlop Pneumatic Tyre Co Ltd v Selfridge & Co Ltd [1915] UKHL 1; (1915) AC 847, Mase v Gab (2021) N8714 at [20], Maoko v Ling (supra), Toligai v Sir Julius Chan & Anor (2012) N4842 at [5]-[6], Papua New Guinea Banking Corporation v Amevo and Bari Investments (supra), and Christian Life Centre v Associated Mission Churches of PNG & Ors (supra).
15. Let me address want of standing which is raised as the second preliminary issue. The second defendant pleads at para. 39 of its defence that the plaintiff has no standing. I note that I have also raised this question with the plaintiff’s counsel at the hearing.
16. A copy of the Title to Portion 143 is adduced in evidence at Annexure A to Exhibit P1 (affidavit of the plaintiff filed 23 November 2022). The plaintiff was granted the Title on 11 July 2018. This fact is not in contention.
17. Evidence of the Title, however, appears to contradict an order that was made earlier by the Lorengau District Court on 16 December 2014 (District Court Order). A copy of the said order is adduced in evidence, that is, at Annexure H to Exhibit P1. His Worship Francis Kalai made the following orders:
18. As stated, the parties are at common ground that the Title to Portion 143 was issued to the plaintiff in 2018. The parties are also at common ground that the original registered proprietor of Portion 143 was Thomas Parakai and that he was issued with the Title on 15 February 1972. The next relevant entry was made on 18 August 2014 which shows that the Title was transferred to Siwa Kiala who is the plaintiff’s mother. However, evidence adduced show that Siwa Kiala passed away on 20 May 2004, some 10 years ago. So, what this implies is that Siwa Kiala passed on, and 10 years after that, the Title to the State Lease was transferred to her name by Late Thomas Parakai. Was that done through the administrators of the estates of Late Thomas Parakai and Siwa Kiala? There is nothing before me to say. Then the situation appears to get more bizarre. On 11 July 2018, the deceased Siwa Kiala was said to have transferred her Title in the State Lease over to the plaintiff, pursuant to s.125 of the Land Registration Act Chapter191 (LRA).
19. But let me be clear. I make the above observations as remarks only. That said, the status quo of Portion 143 and the Title that was issued under it is this: The plaintiff is the registered proprietor. He acquired an indefeasible title over Portion 143 as at 11 July 2018: Mudge v The Secretary for Lands [1985] PNGLR 387, Timothy v Timothy (2022) SC2282, Emmas Estate Development Pty Ltd v. John Mea & Ors [1993] PNGLR 215 (majority view applied) and Steamships Trading Company Limited v. Minister for Lands & Physical Planning, Garamut Enterprises Limited & Ors (2000) N1959.
20. In regard to the District Court order of 16 December 2014, I make the following observations. Section 21(4)(f) of the District Courts Act Chapter 40 prohibits jurisdiction on District Courts to determine disputes over land titles, which include making declarations that may validate land titles that are bona fide in dispute. Only the National and Supreme Courts are bestowed with the jurisdiction to resolve land titles that are under dispute: Gawi v PNG Ready Mixed Concrete Pty Ltd [1984] PNGLR 74, Mudge v Secretary for Lands (supra) and Lilian Angai and Ors v. Gemini Holdings Ltd (2024) SC2543. I also note that the District Court proceeding was a separate matter which has nothing to do with the issues and evidence that this Court is presented with. Further, I do not have any information or evidence that would assist me see what evidence, including copy of the Title to the State Lease, were presented before the District Court for His Worship to make such an order. However, what is certain to me is this: Premised on the adduced evidence on point that is before this Court, including the Title to the State Lease, the plaintiff was not the legal owner of Portion 143 in 2014 or 2015, and that he only became the legal owner on 11 July 2018.
21. So, I now revert to the issue and ask myself this. Does the plaintiff have standing in the matter? And also, does he have a right to sue the second defendant over the second defendant’s involvement over Portion 143 (i.e., in regard to the private commercial arrangement it had with the first defendant and the 2 cross-defendants) in the years 2014 and 2015? My answers to both questions are in the negative. From 20 August 2014 to 10 July 2018, the Title to Portion 143 was registered under the name of Siwa Kiala who was the then registered proprietor, and before that, it was registered under the name of Thomas Parakai who was the original Title holder of the State Lease.
22. I refer to a similar case, that is, China Habour Engineering Company (PNG) Ltd v. Buni Morua (2023) SC2436. This was a case where a leaseholder (the plaintiff) sued a developer for environmental damage that he claimed were caused by the developer’s use of extracted gravel which were excavated and extracted at a site nearby to construct a bridge in Laloki in Central Province. The plaintiff had the title to the land transferred over to his name well after the project had ended and the developer had left the site. He then commenced the action against the developer for environmental damage. The previous owner of the land had an agreement with the developer to excavate and extract gravel from the quarry or riverside. The plaintiff was an immediate family member of the former owner of the land, and he had also received benefits under the agreement that had existed then. I adopt what I said at paras. 24 and 25, which were as follows:
24. The third main proposed ground of review is this. The applicants claim that the trial Judge erred when he awarded damages caused to the environment on the Land in the sum of K4,653,740. They, amongst other reasons, repeat their reasonings as summarised above, that is, (i), that they had entered the Land with the authority of the previous registered proprietors, (ii), they had signed a valid gravel agreement which is in evidence (annexure C to Mr Zhand’s affidavit of 14 July 2023) that showed that their actions in extracting gravel on site was valid; Mr Zhand also attaches receipts of payments that had been made to the previous owners and their associates at the material time, (iii), they could not have committed trespass because the respondent did not own the Land at the material time or in 2015 to 2017.
25. The respondent argues that the applicants should have but had failed to obtain a permit to extract gravel from the Land. He submits that the environmental damage was ongoing even after the applicants left the site. I had put to counsel for the respondent this question; that if the respondent never owned the Land at the material time, then how can they claim and be awarded with damages for trespass: Counsel, with respect did not give a straight answer or provide a legal basis for that except to submit that the trespass and contamination continued after 2017 and continues to this day. I also ask counsel this question; that if the applicants had entered the Land and extracted gravel with the consent of the previous owners, then how can they justify their claim for damage for environmental damage? I inquired that since they did not own the Land then, and that since it was something that was carried out by the previous registered proprietors of the Land with the applicants, how was it that the respondent can claim damages for environmental damage and be awarded with a substantial sum of over K4,000,000. Again, and with respect, I received no satisfactory arguments from counsel.
(Bold lettering mine)
23. The plaintiff herein is not suing for trespass, and the legal status of Portion 143 at the material time was under the name of late Siwa Kiala. The plaintiff did not own the land then, and it is not disputed that the plaintiff had benefited from royalty payments that had been paid by the second defendant under the QLA and the Variation Agreement.
24. Therefore, and in my view, this claim, which appears to be premised on breach of contract or for whatever purported cause of action it may be as pleaded in the SoC, is absurd, frivolous and vexatious. The plaintiff has no standing to bring this proceeding against the second defendant. The plaintiff also has not established a legal right to make a claim against a third party, which is the second defendant, on events that have occurred in the State Lease prior to him acquiring a legal title over it. To commence an action, it is paramount that a plaintiff must demonstrate that he or she has a legal right known to law against the party that he or she intends to sue: PNG Forest Products and Inchcape Berhad v The State and Genia, Minister for Forests [1992] PNGLR 85, Takori v Yagari (2007) SC905, and Philp Lahek and Ors v. Sali Tagau and 1 Or (2024) N10678. The plaintiff, in my view, has failed in that regard.
25. The plaintiff acquired the Title on 11 July 2018, which was some 4 years after the 2nd defendant had completed its operations under the 2 agreements and had left the area. At the material time that the second defendant had been engaged, it had an agreement in place with those persons who had occupied or who had control of, the State Lease or the area concerned. At that time, there were disputes of who may be the custodian of the State Lease on behalf of late Siwa Kiala or Thomas Parakai.
26, However, these alleged uncertainties are inconsequential. What is clear to me is this: The Title to Portion 143 at the material time during and after the signing and operation of the QLA and the Variation Agreement, remained with late Siwa Kiala and not the plaintiff.
OTHER CONSIDERATON/REMARKS
27. Even if I am minded to hear the substantive matter, having considered the evidence, I do not find the plaintiff as a person with any credibility. Having compared his evidence, which are deposed under exhibits P1 and P2, with that of the second defendant through Mr. Avenell, which is Exhibit D1 including his sworn testimony, I find Mr. Avenell to be a credible witness. His evidence is logical and makes a lot more sense of what had transpired at the material time in 2014 and 2015. The plaintiff’s evidence and submissions including his claim as a whole, is riddled with confusions, inconsistencies and fabrications.
28. I uphold the material facts as recalled and presented by the second defendant. This is a case where the plaintiff, who had significantly benefitted from the QLA and the Variation Agreement at the time when he did not own the land, wants to gain more by filing this frivolous claim against the second defendant. There is evidence that shows a lack of genuineness in the plaintiff’s purported claim for environmental damage. The plaintiff benefitted from the QLA in 2014 before he obtained the District Court Order, as well as after that in 2015. Evidence adduced shows that the plaintiff did receive some payments at the time when the royalties were paid directly to the first defendant and the 2 cross-defendants. Except for the second defendant, all the parties involved, including the plaintiff, are family members or related. The plaintiff’s own actions signify to me that he wanted money or benefits more that his concern for the environment, and the reason I say this is because of the fact that the plaintiff had gone to the District Court in 2014 and had obtained orders, not to stop the quarry or its operation in order to protect Portion 143 from further destruction to its environment, but rather, to force upon the second defendant to pay him all the royalty monies instead of paying them to the first defendant and the 2 cross-defendants. And he was successful.
29. However, 4 years after the second defendant had left the site, the plaintiff changed its position and interest in the matter and filed this proceeding.
SUMMARY
30. This case shall be dismissed for the stated reasons.
COST
31. An order for cost is discretionary. I will order cost to follow the event using the party/party cost scale which shall be taxed if not agreed.
ORDERS OF THE COURT
32. I make the following orders:
The Court orders accordingly
________________________________________________________________
Kipes: Lawyers for the Plaintiff
Fiocco & Nutley: Lawyers for the Second Defendant
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