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Passismanua Inland Timber Resource Pty Ltd v Nelulu Land Group Inc [2014] PGSC 51; SC1404 (19 December 2014)

SC1404

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCM NO 4 OF 2007

PASSISMANUA INLAND TIMBER RESOURCE PTY LTD
First Appellant

TIMBERS PNG LTD
Second Appellant

RIMBUNAN HIJAU (PNG) LTD
Third Appellant

V

NELULU LAND GROUP INC
First Respondent

MICAH PITPIT, LAND TITLES COMMISSIONER
Second Respondent

RAGA KAVANA, REGISTRAR OF TITLES
Third Respondent

PEPI S KIMAS, SECRETARY,
DEPARTMENT OF LANDS & PHYSICAL PLANNING
Fourth Respondent

WAIGANI: LENALIA J, CANNINGS J, KASSMAN J

2014: 28 October, 19 December

Practice and procedure – duty of party commencing proceedings to join as defendants persons who have an interest in subject matter of the action or whose cooperation might be necessary to enforce a judgment or who should be joined to ensure that all matters in dispute are properly and fairly determined or that any related dispute is determined – natural justice.

Practice and procedure – abuse of process – commencing proceedings that result in multiplicity of proceedings concerning same subject matter.

Land – whether a certificate of title can be issued in respect of land covered by seawater – ownership of marine passages.

The appellants appealed against an order of the National Court stating that a certificate of title granting ownership of land, a marine passage, to the first respondent is legally valid and good for all intents and purposes. The issue of whether it is lawful to grant ownership of an area of seawater was controversial. The issue had been raised in two previous National Court proceedings involving the first respondent and other parties including the appellants; and neither of those proceedings had concluded when the respondent commenced the National Court proceedings that led to the order appealed against. The first respondent failed to name, as defendants, the appellants or other parties with which it was in dispute in the earlier proceedings. The appellants appealed against the order, arguing amongst other things that the first respondent had breached the principles of natural justice by not joining them as defendants and was guilty of an abuse of process by engaging in a multiplicity of proceedings.

Held:

(1) A person commencing court proceedings has in accordance with the principles of natural justice a duty to join, as defendants, persons who have an interest in the subject matter of the action or whose cooperation might be necessary to enforce a judgment or who should be joined to ensure that all matters in dispute are properly and fairly determined.

(2) An abuse of process is likely to occur if a plaintiff commences proceedings where there is another proceeding on foot concerning the same subject matter or if the plaintiff is a party to other unresolved proceedings involving the same subject matter.

(3) The first respondent commenced proceedings as plaintiff but failed to join, as defendants, the appellants and other persons with an obvious vested interest in those proceedings. This amounted to a breach of the principles of natural justice, and the National Court erred in law in allowing the proceedings to continue and be determined without notice to those persons whose interests would be adversely affected by the order of the Court being sought.

(4) There were two unresolved National Court proceedings concerning the same subject matter pending at the time of commencement of the proceedings that led to the order appealed against. The first respondent had engaged in a multiplicity of proceedings concerning the same or a similar subject matter, without a proper explanation. The first respondent was therefore guilty of an abuse of process.

(5) The appeal was upheld and the order appealed against was quashed and the two unresolved National Court proceedings were consolidated and remitted to the National Court.

Cases cited

The following cases are cited in the judgment:

Anderson Agiru v Electoral Commission (2003) SC687
Grand Chief Sir Michael Somare v Chronox Manek (2011) SC1118
Nelulu Land Group Inc v Vincent Ulelio SCA No 26 of 1998, 1.10.99, unreported
Telikom PNG Ltd v ICCC (2008) SC906
Vincent Ulelio & Ors v Nelulu Land Group, Registrar of Titles and The State [1998] PNGLR 31
Yanta Development Association Inc v Piu Land Group Inc (2005) SC798

APPEAL

This was an appeal against an order of the National Court declaring that a certificate of title granting ownership of a marine passage to an incorporated land group was valid.

Counsel

J L Shepherd for the second and third appellants
J Abone for the first respondent

BY THE COURT: 1. This was an appeal from the judgment of the National Court made on 18 April 2007 in proceedings OS No 452 of 2006. In that decision, the National Court declared that title registered as Volume 33, Folio 44 over land and sea described as Aliwo Passage in Kandrian District, West New Britain Province is legally valid and good in law for all intents and purposes. At that time, the first respondent Nelulu Land Group Inc ("Nelulu") was registered as the owner or titleholder of the Aliwo Passage.

2. At commencement of submissions, counsel for the second appellant Timbers PNG Ltd ("Timbers") and the third appellant Rimbunan Hijau (PNG) Ltd ("RH") informed the Court that the first appellant Passismanua Inland Timber Resource Pty Ltd ("Passismanua") had withdrawn as a party in the appeal and this was confirmed by counsel for Nelulu. There was no appearance for the second, third and fourth respondents and the Court proceeded with the hearing of the appeal on being assured those parties had been duly served with the appeal documents but have shown no interest in the proceedings. It was agreed by respective counsel that the matters in issue were of greater concern to Nelulu, Timbers and RH who were all represented in court.

3. When this appeal last came before the Supreme Court on 30 April 2014, an order was issued directing the parties to deal first with the objection to competency of the appeal filed on 16 May 2014. At the hearing, counsel for Nelulu informed the Court that the objection would be withdrawn. The withdrawal of the objection was confirmed. Nelulu was ordered to pay Timbers' and RH's costs of the objection, such costs awarded on a party/party basis, to be taxed if not agreed.

BACKGROUND

4. Following a Land Titles Commission determination and issue of title to Nelulu, the matter has been the subject of court proceedings in the National Court and the Supreme Court since 1996. The essential background facts, for the purpose of this decision, are detailed below.

5. Passismanua and Nelulu are constituted by customary landowners from the Kandrian District of West New Britain Province. Timbers and RH are logging companies with interests in logging projects in Kandrian pursuant to logging and marketing agreements with Passismanua. From about the year 1993 to the year 2000, Timbers and RH were using Aliwo Passage to tranship logs.

6. Nelulu claims to be the traditional owner of Aliwo Passage and is alleged to have interfered with or threatened to interrupt the activities of Passismanua, Timbers and RH with claims for compensation.

"Aliwo Passage" Portion 382, Milinch of Kandrian, Fourmil of Arawe, West New Britain – Certificate of Title Volume 33, Folio 44

7. Nelulu applied to the Land Titles Commission for a determination of customary ownership of Aliwo Passage. The Land Titles Commission made a determination in favour of Nelulu. Nelulu then applied to the Registrar of Titles and was issued a certificate of title under the Land (Tenure Conversion) Act 1963 on 28 October 1996. The certificate of title Volume 33, Folio 44 ("the title") confirms the grant to Nelulu of an estate in fee simple over an area of seabed (excluding two small coastal islands) comprising 12,578 hectares which is commonly known as Aliwo Passage. The area of seabed is formally described as Portion 382, Milinch of Kandrian, Fourmil of Arawe, West New Britain Province.

National Court proceedings: WS No 1113 of 1996, Ulelio & Others for 7 landowner clans v Nelulu

8. In National Court proceedings WS No 1113 of 1996, Vincent Ulelio & Others, representing seven landowner clans with an interest in Aliwo Passage, claimed the title was fraudulently issued to Nelulu. They claimed that members of Nelulu used threats, duress and fraud to influence the decision of the Land Titles Commission and have the Registrar of Titles issue the title to Nelulu. The seven plaintiffs were named as Vincent Ulelio and Philip Paki (for and on behalf of Kising Clan) first plaintiffs, Sam Kusuk and Michael Rangio (for and on behalf of Aining clan) second plaintiffs, Mata Esekia (for and on behalf of Kailom Clan) third plaintiffs, Thomas Vilalio and Simon Topurpur (for and on behalf of Mukian Clan) fourth plaintiffs, Simon Kariwa (for and on behalf of Nasura sub-clan) fifth plaintiffs, Jelmus Mandrok Yakit (for and on behalf of Voim sub-clan) sixth plaintiffs, and Thomas Narang (for and on behalf of Arian Clan) seventh plaintiffs.

9. On 26 March 1998 Woods J quashed the decision of the Land Titles Commission and declared there is no power or authority under the laws of Papua New Guinea to grant absolute ownership or fee simple over the high seas, and declared the certificate of title a nullity and the area of sea referred to as Aliwo Passage belongs in the public domain (Vincent Ulelio & Ors v Nelulu Land Group, Registrar of Titles and The State [1998] PNGLR 31).

Supreme Court proceedings: SCA No 26 of 1998, Nelulu v Ulelio & Others for 7 landowner clans

10. Nelulu then appealed against the decision of Woods J, in SCA No 26 of 1998. On 1 October 1999 the Supreme Court quashed the decision of Woods J on the basis that the issue concerning the common law principle of "public domain over sea" had not been pleaded. The Supreme Court remitted the matter to the National Court for rehearing. The Supreme Court said:

We consider that in the circumstances the parties should be directed to address the issue by adducing any evidence they consider necessary and readdress the Court for it to reconsider. We agree with the learned trial judge that the issue is of significant precedent value to the development of the indigenous jurisprudence in this country and that the parties should address it more substantively. (Nelulu Land Group Inc v Vincent Ulelio SCA No 26 of 1998, 1.10.99, unreported.)

11. Since that Supreme Court decision in 1999, the National Court proceeding WS No 1113 of 1996 has remained pending.

National Court proceedings: WS No 1170 of 2003, Nelulu v RH and Passismanua

12. On 21 August 2003 Nelulu filed a writ of summons, WS No 1170 of 2003. The defendants in that proceeding were RH and Passismanua. The relief sought by Nelulu was inter alia for RH and Passismanua to pay K3,960,000.00 (K3.96 million) for alleged rental due for the usage of Aliwo Passage from 1993 until the closure of logging operations in 2000. On 21 April 2006 the National Court ordered a stay of proceedings in WS No 1170 of 2003 until the issue of validity of "title" issued by the Land Titles Commission is determined.

13. We quote in full the last two pages of what Salika J, as he then was, said when his Honour stayed these proceedings as it is critical to this appeal:

The quashing of the decision of the National Court by the Supreme Court did not validate the title issued by the Land Titles Commission over Aliwo Passage. It simply quashed the decision of Woods J. Woods J declared the said title invalid. The Supreme Court quashed his decision and said the issue of title or ownership of the Aliwo Passage needed to be determined properly with proper evidence. The question of whether the title issued by the Land Titles Commission over Aliwo Passage is valid therefore remains to be determined. That is the position. The question of who should take the matter back to the National Court to be properly determined was not necessarily confined to the plaintiffs. The direction by the Supreme Court was to the "parties" to "address" the issue by adducing any evidence they consider necessary and readdress the Court for it to reconsider. Since the Supreme Court decision the parties have not taken steps to readdress the Court on the issue of whether the title on Aliwo Passage is a valid one. In the meantime, are the plaintiffs entitled to rely on the title as being valid? I think they are entitled to rely on it as being a valid title unless it is invalidated by a court of competent jurisdiction. The defendants are challenging the title. It is in their interest that they take steps to readdress the Court on the validity of the title. They have not taken restraining orders against the plaintiffs until the issue is determined. The Supreme Court decision did not validate the title nor did it invalidate it. The situation simply reverted to the position before the National Court decision. The position before the National Court decision was that there was a title issued by the Land Titles Commission. The validity of the title is being challenged. Let the parties readdress the Court on the validity of the title. In this case all the parties have done nothing to expedite the hearing of that issue. The Supreme Court directions are still pending. I cannot override the directions of the Supreme Court and give new directions until steps are taken to put into effect the decision of the Supreme Court. In this case all the parties have failed to advance the challenge to the validity of title. This brings me to the question of whether the proceedings in this matter should be dismissed. Before the proceedings in this matter can be advanced any further, the primary issue of title over the sea and thus ownership issues need to be determined first. There are some matters pleaded in the writ of summons that concern me which could affect the entire proceedings. At this stage I am not prepared to dismiss the proceedings but am of the view that the decision of the Supreme Court regarding validity of the title be determined first. In summary the orders of the Court are that the application by the defendants filed on 8 December 2005 is refused. As all parties have sat on the Supreme Court decision, costs of this application are that each party pay their own costs. These proceedings are stayed until the issue of validity of the "title" issued by the Land Titles Commission is determined.

14. The stay order of 21 April 2006 is still in force.

National Court proceedings: OS No 452 of 2006, Nelulu v Land Titles Commissioner, Registrar of Titles and Secretary for Lands & Physical Planning

15. Instead of arranging for a rehearing of proceedings WS No 1113 of 1996 in the National Court as directed by the Supreme Court, which was repeated specifically by the National Court per Salika J in WS 1170 of 2003, Nelulu commenced fresh proceedings by way of judicial review in OS No 452 of 2006. In that proceeding, Nelulu sought an order inter alia that its certificate of title over Aliwo Passage was valid. Nelulu named as defendants Micah Pitpit, Land Titles Commissioner, along with Raga Kavana, Registrar of Titles, and Pepi S Kimas, Secretary for Lands & Physical Planning.

16. In that proceeding, Nelulu did not include Vincent Ulelio and the others representing the seven landowner clans who were plaintiffs in National Court proceedings WS No 1113 of 1996, who claimed an interest or interests in Aliwo Passage and who had alleged that the title to Aliwo Passage was fraudulently issued to Nelulu.

17. Neither did Nelulu name in the proceeding Passismanua, Timbers and RH who were parties to the National Court proceedings commenced by Nelulu in WS No 1170 of 2003 where Nelulu claimed K3.96 million for alleged rental due for the usage of Aliwo Passage from 1993 until the closure of logging operations in 2000.

18. In this matter OS No 452 of 2006, leave to apply for judicial review was granted on 19 July 2006. The matter returned to the National Court on 18 April 2007 and was, by coincidence, heard by Salika J as he then was. The National Court heard Nelulu in the absence of the defendants named in the proceedings and ordered that the certificate of title is legally valid and good for all intents and purposes. Being aggrieved with the decision of the National Court of 18 April 2007, this appeal was filed.

GROUNDS OF APPEAL

19. Ground 4 was not pursued. Grounds 1, 2, 3 and 5 of the appeal have been pursued and they are:

(1) The National Court erred in that it failed to consider and determine whether all persons having an interest in the subject matter of the decision had been given proper notice of the proceedings and an opportunity to be heard.

(2) The decision was given in the absence of, and without proper notice to, the appellants who had an interest in the subject matter of the proceedings and were thereby denied natural justice.

(3) The National Court erred in that it purported to determine that the first respondent had a valid title over an area which included an area of seabed.

(5) Further or alternatively, the proceedings were an abuse of process in that they substantially duplicated proceedings WS No 1113 of 1996 then pending before the National Court.

20. The issues for determination in this appeal can be restated as follows:

(a) Did any other party have an interest in the issue for determination being the validity or otherwise of Nelulu's title to Aliwo Passage and, if so, were they entitled to be heard in proceedings OS No 452 of 2006? This issue relates to grounds (1) and (2).

(b) Were proceedings OS No 452 of 2006 a duplication of proceedings WS No 1113 of 1996? This issue relates to ground (5).

(c) Did the National Court err in that it purported to determine that Nelulu had a valid title over an area of land which included an area of seabed? This issue relates to ground (3).

(a) WHO WERE INTERESTED PARTIES?

21. The parties in proceedings OS No 452 of 2006 were Nelulu as the plaintiff and Micah Pitpit, Land Titles Commissioner, along with Raga Kavana, Registrar of Titles and Pepi S Kimas, Secretary for Lands & Physical Planning as the First, Second and Third Defendants respectively.

22. A party is entitled to be joined and heard in proceedings in a court of competent jurisdiction where the party has an interest in the subject matter of the action or in a question of law or fact in the action, where the party's cooperation might be necessary to enforce a judgment, where the party has a right under an Act or Rule to be joined or where the party should be joined to ensure that all matters in dispute are properly and fairly determined and that any related dispute is determined to avoid a multiplicity of proceedings or where granting of the very relief sought by the plaintiff may adversely affect any other person's interest (Yanta Development Association Inc v Piu Land Group Inc (2005) SC798). The National Court Rules as to the joinder and addition of parties can be found in Order 5, Rules 2 and 8.

23. We have already stated that Vincent Ulelio & Others representing seven landowner clans claimed to have an interest in Aliwo Passage and they also claimed that the title obtained by Nelulu through the Land Titles Commission was issued or obtained fraudulently. Nelulu was aware of that not only as a matter of fact but also by the fact that those seven clans had made their assertions in a separate legal proceeding in which Nelulu was the defendant, WS No 1113 of 1996.

24. The interests of the seven landowning clans were noted as being adverse to that of Nelulu and that was clearly referred to by the Supreme Court in SCA No 26 of 1998. This was reiterated by Salika J in WS No 1170 of 2003 where his Honour ordered a stay of those proceedings until the issue of validity of title issued by the Land Titles Commission is determined. This was also conceded by counsel for Nelulu in the court below when reference was made to a direction issued by Injia J, as he then was, when his Honour gave directions leading to the hearing. Counsel for Nelulu referred to the earlier proceedings challenging title and his Honour gave directions that they be served. This is patently clear from the transcript of proceedings in the court below which can be found at page 247 of the appeal book. There can be no doubt that Passismanua also had an interest for the same reasons as the seven clans mentioned above.

25. Timbers and RH were also interested parties and should have been made parties to the proceedings in the court below. They had an interest in the final adjudication as to the validity of Nelulu's title. They had used Aliwo Passage for transhipment of logs and Nelulu had commenced legal action claiming damages for the use by Timbers and RH of Aliwo Passage. WS No 1170 of 2003 had been stayed pending resolution of the very same issue: the validity of Nelulu's title. That proceeding remains pending.

26. Were the seven clans along with Passismanua, Timbers and RH advised of the proceedings in OS No 452 of 2006? The record shows they were not named as parties. That in itself is critical and sufficient to uphold the first ground of the appeal. Although they were not named as parties to the proceedings, it is apparent from the transcript that the court below did direct that they be served and their non-appearance was the basis for concerns repeatedly raised by the Court in the hearing which was conducted with only Nelulu appearing.

27. Nelulu's counsel claimed to have served the seven clans. However the seven clans were not represented in the appeal before us so we were not assisted by them on this critical issue. The assertion by Nelulu that the seven clans were advised remains untested and it would be unsafe to accept what counsel for Nelulu says. In these circumstances, we consider that the following parties had a genuine interest in the issues for determination in OS No 452 of 2006: Vincent Ulelio and others representing the seven other landowning groups claiming to have an interest in Aliwo Passage, Passismanua, Timbers and RH. Those parties were entitled to be heard in OS No 452 of 2006. They should have been joined as defendants or at least Nelulu should have given each of them formal written notice of the proceedings. The National Court should, with respect, have insisted that Nelulu prove that it had given full written notice to the other parties. Its failure to insist on such proof was an error of law and resulted in a denial of natural justice.

We therefore uphold grounds of appeal (1) and (2).

(b) WAS OS No 452 OF 2006 A DUPLICATION OF WS No 1113 OF 1996?

28. The next issue is whether OS No 452 of 2006 was a duplication of proceedings WS No 1113 of 1996. In WS No 1113 of 1996, the plaintiffs were seven landowner clans who claimed an interest in Aliwo Passage and they also claimed the title was fraudulently issued to Nelulu. In OS No 452 of 2006, Nelulu sought an order inter alia that the certificate of title over Aliwo Passage was valid. In both proceedings the validity of the title to Aliwo Passage was the primary issue for determination. Although Nelulu was a party in both proceedings, the parties opposing Nelulu were not the same. In the earlier proceeding, Nelulu was a defendant and the plaintiffs were the seven clans described above. In the latter proceeding Nelulu was the plaintiff and the defendants were Micah Pitpit, Land Titles Commissioner, along with Raga Kavana, Registrar of Titles and Pepi S Kimas, Secretary for Lands & Physical Planning.

29. Despite there being different parties opposing Nelulu, the issues were common. This was a case of duplication. Nelulu should not have commenced proceedings OS No 452 of 2006. Nelulu engaged in a multiplicity of proceedings without a proper explanation and that amounts to an abuse of process (Anderson Agiru v Electoral Commission (2003) SC687, Telikom PNG Ltd v ICCC (2008) SC906, Grand Chief Sir Michael Somare v Chronox Manek (2011) SC1118).

We therefore uphold ground (5) of the appeal.

CONCLUSION

30. Grounds (1), (2) and (5) of the appeal have been upheld. These grounds provide a sufficient basis on which to uphold the appeal and quash the decision of the National Court in OS No 452 of 2006. It is unnecessary to consider the other grounds.

31. Nelulu should have reactivated a rehearing of proceedings WS No 1113 of 1996 and we go further to say that proceeding should be consolidated with proceeding WS No 1170 of 2003 so that Passismanua, Timbers and RH are also included in the determination of the validity or otherwise of title held by Nelulu. That will ensure that there is finality to this long outstanding and protracted litigation. Costs will follow the event.

ORDER

The formal order of the Court is:

(1) The appeal is upheld.

(2) The orders of the National Court of 18 April 2007 in OS No 452 of 2006 are quashed.

(3) The proceedings OS No 452 of 2006 are dismissed.

(4) Both National Court proceedings WS No 1113 of 1996 and WS No 1170 of 2003 shall be consolidated and the matters relisted for directions as to:

• (a) the provision of notice to all parties for the further conduct of the proceedings;
  
• (b) determination of the validity of Nelulu's title as the primary issue and all other related issues for hearing and determination; and
  
• (c) the possible transfer of proceedings for hearing and determination to Kimbe, West New Britain Province, or such other location that is accessible and convenient for all parties.
  

(5) Nelulu shall pay the costs incurred by Timbers and RH in this appeal on a party-party basis which shall, if not agreed, be taxed.

Judgment accordingly
______________________________

Ashurst Lawyers: Lawyers for the second and third appellants
Parkil Lawyers: Lawyers for the first respondent