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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO.135 OF 2020
BETWEEN:
REX MAURI in his capacity as signatory to Hidden Valley MOA
dated 5 August 2005 and President of Nakuwi Association Inc.
First Appellant
AND:
NAKUWI ASSOCIATION INC.
Second Appellant
AND:
JERRY GARRY in his capacity as the Managing Director
of Mineral Resources Authority
First Respondent
AND:
MINERAL RESOURCES AUTHORITY
Second Respondent
AND:
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent
Waigani: Batari, David & Anis JJ
2021: 28th July & 15th September
MINING LAW – payment of royalties by State from Hidden Valley Gold Mine operations – Memorandum of Understanding entered into by stakeholders governs payment of royalties to recipients identified – landowner recipient represented by appellants requested to use accumulated funds of another recipient, settler communities, for law and order program including assisting police and District Courts in Wau and Bulolo – settler communities funds managed by developer in the absence of a trust set up by a Trust Deed – intervention by first and second respondents valid and lawful – appeal dismissed - Mineral Resources Authority Act, Sections 5 and 6.
Cases Cited:
Amos Ere v National Housing Corporation (2016) N6515
Waigani Heights Development Ltd v Benjamin Mul (2018) 7162
Counsel:
Justin Haiara, for the Appellants
Russel Uware, for the Respondents
RULING
15th September, 2021
1. BATARI & DAVID JJ: INTRODUCTION: This is an appeal against the whole of the judgment and orders of the National Court given on 21 September 2020 at Lae, Morobe Province dismissing proceedings OS No.132 of 2020, Rex Mauri in his personal capacity as a landowner and as member and President of Nakuwi Association Inc & Anor v Jerry Garry in his capacity as the Managing Director of Mineral Resources Authority & Others (the National Court’s decision). Aggrieved by the National Court’s decision, this appeal was commenced by Notice of Appeal filed on 30 October 2020.
RIGHT OF APPEAL
2. The appeal lies without leave.
GROUNDS OF APPEAL
3. The grounds of appeal are:
ORDERS SOUGHT
4. The orders sought are:
FACTS
5. The facts are not disputed. The First Appellant is a member and President of the Second Appellant, Nakuwi Association Inc. The Second Appellant is an Association comprising landowners from Nauti, Kuembu and Winima villages. The First Respondent is the Managing Director of the Second Respondent, Mineral Resources Authority, a governmental body or agency of the Third Respondent, The Independent State of Papua New Guinea (the State) and is established pursuant to Section 4 of the Mineral Resources Authority Act.
6. On 4 April 2005, the State granted a Mining Lease 151 (ML 151) to Morobe Consolidated Goldfields Limited to carry out a mining operation in the Upper Wau/Bulolo area in Morobe Province and to mine gold and silver within ML 151.
7. On 5 August 2005, a Memorandum of Agreement Relating to the Hidden Valley Gold Project was entered into between The Independent State of Papua New Guinea, Morobe Provincial Government, Morobe Consolidated Goldfields Limited, Nakuwi Association Inc., The Wau Rural Local-level Government, The Watut Rural Local-level Government, and Wau Bulolo Urban Local-level Government dated 5 August 2005 (the MOA). The MOA, among other things, contained an undertaking by the State to pay royalties to the Morobe Provincial Government, Mining Lease Landowners and immediate impact Local-level Governments at specific percentages.
8. The “Settler Communities” are entitled to 2% of the total royalties paid under Clause 3.2(d)(i) of the MOA.
9. The term “Settlers” is defined under the MOA as individuals or groups of people that have been granted permissive occupancy by the landowners to occupy and use land within the tenements prior to the commencement of the MOA.
10. Clause 3.3(d) of the MOA requires a trust to be set up and managed by Morobe Consolidated Goldfields (MCG), a wholly owned subsidiary of Harmony Gold Mining Company Limited and any permitted assigns or successors of Harmony Gold Mining Company Limited (Harmony), to cater for payments in a separate trust deed. MCG has never set up the trust since the execution of the MOA, but maintains the funds generally for the Settler Communities. As at March 2020, the accrued funds totaled K2,814,691.87.
11. The appellants submitted a proposal to MCG for a sum of K2,306,390.54 to be released from the funds held by MCG for the Settler Communities to be applied towards addressing the growing law and order issues and running relevant programmes in their communities in the mining area. They proposed to apply the monies specifically towards; the purchase of five vehicles for the police and for administration and operational costs (K1,171,184.14), Court houses at Wau and Bulolo and to purchase for the use of the Judiciary, a vehicle (K385,439.82); and to meet costs of awareness conducted by the Second Appellant (K749,766.58).
12. On 4 October 2019, a stakeholders’ meeting was convened at the Phils Motel in Lae at the request of the appellants to discuss the release of the funds requested.
13. No response having been received to their request after several follow-ups, the appellants threatened to take legal action against the First and Second Respondents and gave a notice of their intention to claim under Section 5 of the Claims By and Against the State Act dated 30 January 2020 giving the respondents 31 days to respond.
14. On 7 February 2020, in a meeting held at the Lae International Hotel, Morobe Province attended by representatives of various stakeholders including the Second Respondent, Mineral Resources Authority, Morobe Provincial Government, MCG and the First and Second Appellants, the appellants’ request was granted, but after a lengthy discussion, it was resolved to release the total accrued funds at the time of K2,814,691.87 to be applied in the following manner:
(a) 1 x 10 seater, Land Cruiser for Wau Police Station;
(b) 1 x 10 seater, Land Cruiser for Bulolo Police Station; and
(c) 1 x 5 Door, Land Cruiser for ACP, Northern Command.
(a) 1 x 10 seater, Land Cruiser; and
(b) 1 x 4 Door, Double Cabin, Land Cruiser.
15. Due to the non-implementation of the resolution of 7 February 2020, by letter to the First and Second Respondents dated 16 March 2020, the appellants gave notice to sue them if they failed to authorise the release of the funds to the Second Appellant within three working days of the receipt of that letter.
16. Not satisfied with the resolution of 7 February 2020, by letter of 30 March 2020 attached to which was a set of guidelines for use of future “Settler Communities” funds, the First and Second Respondents wrote to the Chief Executive Officer of Harmony instructing him to release a total of K1,728,662.36 in the following manner:
(a) Three vehicles for the Police based on the quote for K658,998.27:
(i) 1 x 10 seater, Land Cruiser for Wau Police Station;
(ii) 1 x 10 seater, Land Cruiser for Bulolo Police Station;
(iii) 1 x 5 Door, Land Cruiser for ACP, Northern Command.
(b) 1 x 10 seater, Land Cruiser for Bulolo District Court Magistrate for K219,664.09.
2. Infrastructure contribution of K400,000.00 to be managed by [MCG] and paid to a contract[or] to carry out the maintenance and renovation of:
(i) Wau Bulolo Police Station; and
(ii) Bulolo Magistrate’s house.
3. Direct payment to Nakuwi Association Account for the Law and Order Programme of K300,000.00 for Village Awareness Expenses.
4. Direct payment to ACP, Northern Command for Police Operations of K150,000.00.
17. Through the same letter, the First and Second Respondents further instructed Harmony to continue to receive and manage the royalties the “Settler Communities” were entitled to until the signing of a revised Memorandum of Agreement.
18. Aggrieved by the actions and decisions of the First and Second Respondents that were conveyed to Harmony which effectively varied the stakeholders’ resolution of 7 February 2020, the appellants commenced the proceedings in the National Court seeking a number of declarations and orders to effectively facilitate the release of the accrued royalties payable to the “Settler Communities” in the sum of K2,814,691.87.
ISSUES
19. The issues that arise from the grounds of appeal for the Court’s determination are:
VALIDITY OF STAKEHOLDERS’ RESOLUTION OF 7 FEBRUARY 2020 TO USE SETTLER COMMUNITIES’ FUNDS
Submissions
20. Mr. Haiara of counsel for the appellants contends that neither Section 5 of the Mineral Resources Authority Act nor Section 5 of the Mining Act or any provision of the MOA authorise the First and Second Respondents to make a unilateral decision to override the decision made on 7 February 2020 by the other stakeholders such as Harmony, the developer of the Hidden Valley Gold Mine and the landowners represented by the appellants who are parties to the MOA and in particular in circumstances where the appellants represented the landowners including the “Settler Communities” in negotiations and subsequent execution of the MOA. It is also submitted that unless agreed to by all the stakeholders, the guidelines proposed by the First and Second Appellants for the disbursement of “Settler Communities” funds were not legally binding and therefore could not be relied on by the National Court.
21. Mr. Uware of counsel for the respondents argues that the National Court did not commit any error so the finding of the court should not be disturbed. The main reason, he states, was that while the “Settler Communities” were not parties to the MOA and had little or any say on the payment of royalties from the mining operations, they were allocated 2% of the total royalties so the Second Respondent was duty-bound by law to protect their interest. He submits that the resolution passed on 7 February 2020 was contrary to Clause 3.3(d) of the MOA and therefore not valid and unenforceable.
Consideration
22. Section 5 of the Mining Act states that all minerals existing on, in or below the surface of any land in Papua New Guinea, including any minerals contained in any water lying on any land in Papua New Guinea, are the property of the State.
23. Section 5 of the Mineral Resources Authority Act sets out the functions of the Mineral Resources Authority and it states:
“5. Functions of the Authority.
The functions of the Authority, subject to Section 8, are —
(a) to advise the Minister on matters relating to mining and the management, exploitation and development of Papua New Guinea's mineral resources; and
(b) to coordinate and promote the orderly exploration and development of mines in Papua New Guinea for the exploitation of the country's mineral resources; and
(c) to receive, assess, register, record and manage applications and dealings in mineral tenements in Papua New Guinea and provide technical expert advice and information to the Mining Advisory Council, the Minister and the State; and
(d) to oversee the administration and enforcement of the Mining Act 1992, the Mining (Safety) Act (Chapter 195A), the Ok Tedi Acts and the Ok Tedi Agreement, the Mining (Bougainville Copper Agreement) Act (Chapter 196) and the agreements that are scheduled to that Act, and any other legislation relating to mining or to the management, exploitation or development of Papua New Guinea's mineral resources; and
(e) to negotiate mining development contracts under the Mining Act 1992, as agent for the State; and
(f) to act as agent for the State, as required, in relation to any international agreement relating to mining or to the management, exploitation or development of Papua New Guinea's mineral resources; and
(g) to coordinate and monitor the implementation of the State's undertakings and obligations under agreements, and such other legal, contractual, commercial or social obligations in accordance with government policies on mining and the applicable laws that are necessary for the management of the mining sector; and
(h) to receive and collect, on its own account and on behalf of the State, any fee, levy, rent, security, deposit, compensation, royalty, cost, penalty, or other money or other account payable under the Mining Act 1992; the Mining (Safety) Act (Chapter 195A), the Ok Tedi Acts and the Ok Tedi Agreement, the Mining (Bougainville Copper Agreement) Act (Chapter 196) and the agreements that are scheduled to that Act, or any other Act the administration of which is the responsibility of the Authority from time to time; and
(i) on behalf of the State, to receive and collect from persons to whom a tenement has been granted under the Mining Act 1992, the security for compliance with the person's obligations under the Mining Act 1992, required to be lodged with the Registrar and to hold such security received or collected; and
(j) on behalf of the State, to administer and be responsible for the administration of any public investment programme relating to mining; and
(k) to conduct systematic geo-scientific investigations into the distribution and characteristics of Papua New Guinea's mineral and geological resources, located on, within or beneath the country's land mass, soils, subsoil and the sea-bed; and
(l) to provide small scale mining and hydro geological survey data services, and occupational health and safety community awareness programmes; and
(m) to collect, analyse, store, archive, disseminate and publish (in appropriate maps and publications) on behalf of the State geo-scientific information about Papua New Guinea's mineral and geological resources; and
(n) to administer and implement National Government policies and priorities and carry out such functions as are given to the Authority by this Act or by any other law; and
(o) generally to do such supplementary, incidental, or consequential acts and things as are necessary or convenient for the Authority to carry out its functions.”
24. Clause 3 of the MOA relates to the undertaking by the State to pay royalties from the mining operations called the Hidden Valley
Project to recipients and percentages specified thereunder and it states:
“3 ROYALTIES
3.1 The State undertakes, pursuant to the Mining Act, 1992 and, in line with current sustainable development planning goals, to pay royalties from the Project to the Provincial Government, Mining Lease Landowners, and the LLGs as follows:
(a) Provincial Government 42%
(b) Immediate Impact Area LLGs 14%
(c) Affected Communities 2.5%
(d) Others 2.5%
(e) Landowners 39%
3.2 The State agrees that the distribution of the total royalties received by the recipients of royalties in Clause 3.1 above shall be as follows:
(a) PROVINCIAL GOVERNMENT
MPG Five-Year Provincial Development Plan 42%
(i) Provincial Government 36%
(ii) Mumeng LLG 3%
(iii) Waria LLG 2%
(iv) Buang LLG 1%
(b) IMMEDIATE IMPACT AREA LOCAL LEVEL GOVERNMENTS 14%
(i) Wau Rural LLG 5%
(ii) Watut LLG 5%
(iii) Wau/Bulolo Urban LLG 4%
(c) AFFECTED COMMUNITIES 2.5%
(i) Highway Communities 0.5%
(ii) River Communities 0.5%
(iii) Subsidiary Landowner Communities 1.5%
(d) OTHERS 2.5%
(i) Settler Communities (Claims) 2%
(ii) Wafi LOA 0.5%
(e) LANDOWNERS 39%
(i) NAKUWI Association 2%
(ii) Future Generation Trust 2%
First two (2) years operation:
(i) Nauti People 20%
(ii) Kuembu People 7.5%
(iii) Winima People 7.5%
After first two (2) years of operation
(i) Nauti People 17.5%
(ii) Kuembu People 8.75%
(iii) Winima People 8.75%
3.3 The royalties shall be paid in the following manner: -
(a) In the case of the “Provincial Government” into the Morobe Provincial Government Consolidated Revenue Account.
(b) In the case of the Local-level Governments into their respective operating accounts.
(c) In the case of the affected communities funds will be managed by Nakwi Association Inc. and distribution to be determined by subsidiary landowners in consultation other project stakeholders.
(d) In the case of Settler Communities, a trust shall be set up and maintained by MCG to cater for payments in a separate Trust Deed. In the case of Wafi Landowner Association representing YDA and HLA will deposited into the Wafi Landowner Association operating account.
(e) In the case of NAKUWI Association Inc. into the NAKUWI Association Inc. operating account.
(f) In the case of the Future Generation Trust into the Future Generation Trust Account.
3.4 In the case of a dispute arising between the parties the State pursuant to the Public Finance Management Act 1995 will establish and administer a Trust Account for the affected royalties.”
25. The National Court’s reasoning is found at paragraphs 28 to 32 of the judgment and we relevantly restate them below:
“28. What rights do the plaintiffs have which they seek to protect and enforce? The plaintiffs are one of the seven (7) stakeholders and signatory to the 2005 Memorandum of Agreement (MOA). Under cause 3.2(e) of the MOA, the State agreed to pay 2% royalty payment to Settler Communities. “Settlers” is defined as individuals or groups of people that have been granted permissive occupancy by the landowners to occupy and use land within the tenement prior to the commencement of this agreement. They are different and distinct from the Plaintiffs, who are landowners.
“34. Does s155(4) of the Constitution confer a primary power on this Court to grant a stay or other interim relief before leave to apply for judicial review is granted? In my view s155(4) of the Constitution is not applicable to O 16 r 3(8). That section is not the source of primary jurisdictional power. The Court’s primary power or jurisdiction is given by O 16 r3(8) of the National Court Rules. Section 155(4) confers jurisdiction on the Court to issue facilitative orders in aid of enforcement of a primary right conferred by law, whether such right be conferred by statute or subordinate legislation enacted under the enabling statute: SCR No.2 of 1981 [1982] PNGLR 150 at 154, Uma More v UPNG [1985] PNGLR 401 at 402.”
26. Clause 44.2 of the MOA states:
“The parties shall hold a full review of this Agreement after 3 years from the date of commencement of production as verified in writing by the Department of Mining and every two years thereafter.”
27. Until the MOA is reviewed in accordance with Clause 44(2) of the MOA, Clauses 3.2(d)(i) and 3.3(d) speak for themselves. The stakeholders’ meeting of 7 February 2020 was not a review of the MOA. It was a meeting held at the behest of the appellants to authorise them to use the funds of another recipient of royalties under the MOA.
28. The “Settler Communities” are entitled to be paid 2% of the total royalties. Their royalties are to be paid to a trust set up and maintained by MCG pursuant to a separate Trust Deed. As recipients of royalties, the “Settler Communities” should be the ones complaining about not accessing their funds being managed by MCG in the absence of a trust. The appellants are entitled to royalties payable to them under Clause 3.2(e) of the MOA. They are busybodies, being one recipient of royalties prying into the affairs of another recipient of royalties, the Settler Communities, in terms of the use of or the manner in which their funds should be used.
29. We generally concur with Mr Uware that while the “Settler Communities” were not parties to the MOA and had little or no say on the payment of royalties from the mining operations, they were fortunate to be allocated 2% of the total royalties and the First and Second Respondents were duty-bound under the broad powers granted to the Second Respondent by Section 5 of the Mineral Resources Authority Act to intervene and protect their interest. The relevant provisions that grant power to the Second Respondent to intervene, through the First Respondent, as it did in the present case under Section 5 are sub-sections (d), (g), (j) and (o). The intervention by the First and Second Respondents was valid and lawful.
30. Section 6 of the Mineral Resources Authority Act also gives the Second Respondent additional power to do all things necessary or convenient to be done for or in connection with the performance of its functions. It states:
“6. Powers of the Authority.
The Authority has, in addition to the powers otherwise conferred on it by this Act and any other law, power to do all things necessary
or convenient to be done for or in connection with the performance of its functions.”
31. The resolution passed at a stakeholders’ meeting on 7 February 2020 in Lae was contrary to Clause 3.3(d) of the MOA and
therefore not valid and unenforceable.
32. Given this, we find that the National Court did not commit any error and dismiss this ground as having no merit.
EXECUTION OF STATUTORY FUNCTION BY THE SECOND RESPONDENT
33. We adopt our reasons for the determination of the first ground and apply them here. The resolution passed at a stakeholders’ meeting on 7 February 2020 in Lae was contrary to Clause 3.3(d) of the MOA and therefore not valid and unenforceable.
34. We find that the National Court did not commit any error and dismiss this ground as having no merit.
DISTRIBUTION OF FUNDS IN ACCORDANCE WITH THE MOA
35. Again, we adopt our reasons for the determination of the first ground and apply them here. The resolution passed on 7 February
2020 was contrary to Clause 3.3(d) of the MOA and therefore not valid and unenforceable. The relevant provisions that grant power
to the Second Respondent to intervene as it did in the present case under Section 5 are sub-sections (d), (g) and (o). Section 6
of the Mineral Resources Authority Act also gives the Second Respondent additional power to do all things necessary or convenient to be done for or in connection with the
performance of its functions.
36. We find that the National Court did not commit any error and dismiss this ground as having no merit.
NO RESTROSPECTIVE APPLICATION OF SECTION 5
Submissions
37. Mr. Haiara for the appellants contends that Section 5 of the Mineral Resources Authority Act does not specifically apply retrospectively to obligations under mining agreements or other legal or contractual agreements or undertakings that were entered into under the Mining Act and prior to the commencement of Mineral Resources Authority Act in 2018. He therefore submits that since the MOA was signed in August 2005 under the Mining Act and before the commencement of the Mineral Resources Authority Act in 2018, the National Court erred when it did not find that the MOA was not subject to Section 5 of the Mineral Resources Authority Act.
38. Mr. Uware argues that the National Court did not commit any error because Section 5(d) of the Mineral Resources Authority Act allows the Second Respondent to oversee the administration and enforcement of the Mining Act 1992, the Mining (Safety) Act (Chapter 195A), the Ok Tedi Acts and the Ok Tedi Agreement, the Mining (Bougainville Copper Agreement) Act (Chapter 196) and the agreements that are scheduled to that Act, and any other legislation relating to mining or to the management, exploitation or development of Papua New Guinea's mineral resources.
39. Mr Uware also contends that under Section 5(j) of the Mineral Resources Authority Act, the respondents can administer and be responsible for the administration of any public investment program relating to mining.
40. Mr Uware submits that in the exercise of the powers granted by these provisions, it enabled the First Respondent as the Managing Director of the Second Respondent to intervene and issue directions to Harmony to disburse monies contrary to the stakeholders’ resolution passed in Lae on 7 February 2020.
Consideration
41. Mr Haiara’s submissions are misconceived and rejected. The appellants relied on Section 5 and other enabling provisions of the Mineral Resources Authority Act to claim a declaration in the National Court that the respondents were obliged to honour the stakeholders’ resolution of 7 February 2020 and facilitate the speedy release of the Settler Communities’ funds. The appellants’ conduct is wanting. Section 5(d), (g), (j) and (o) of the Mineral Resources Authority Act are the appropriate statutory basis for the Second Respondent’s oversight of mining agreements entered into under the Mining Act prior to the commencement of the Mineral Resources Authority Act and to coordinate and monitor the implementation of the State’s undertakings and obligations under agreements it is a party to.
42. We find that the National Court did not commit any error and dismiss this ground as having no merit.
FINDING THAT THERE WAS NO CONTROVERSY BETWEEN THE PARTIES
Submissions
43. Mr. Haiara contends that the National Court erred in law and fact in finding at paragraph 30 of the judgment that there was no controversy between the parties for Court’s determination when:
1. The Second Appellant which is a party to the MOA representing the landowners disputed the unilateral decision made by the First and Second Respondents representing the State, another party to the MOA, to determine how the Settler Communities funds should be disbursed when they on 30 March 2020 varied the amounts to be disbursed contrary to the stakeholders’ resolution of 7 February 2020.
2. The appellants had clear standing and interest in connection with the disbursement of “Settler Communities” funds in the absence of a trust set up under a separate Trust Deed.
44. Mr. Uware for the respondents submits that the National Court did not commit any error when it found that there was no controversy between the parties for Court’s determination as:
1. the appellants sought declaratory orders in the National Court to declare; the stakeholders’ resolution of 7 February 2020 valid and binding on the respondents; and that the First and Second Respondents were duty-bound to disburse the “Settler Communities” funds in accordance with the stakeholders’ resolution of 7 February 2020;
2. The National Court’s judgment was made in the context of the “Settler Communities” being recipients of 2% of the total royalties paid by the State under the MOA;
3. The parties to the MOA may have had issues with the disbursement of “Settler Communities” funds, but for purposes of disbursing what was due to them, there was no real controversy that could merit a hearing brought by originating summons; and
4. The National Court’s judgment was supported by case authorities.
Consideration
45. A synopsis of the law on declaratory relief was given by Hartshorn J in Waigani Heights Development Ltd v Benjamin Mul (2018) 7162 where His Honour observed at [8] to [12]:
“8. As the plaintiff seeks declaratory relief, it is necessary to consider the factors that are required to be established before a declaratory order can be made. These factors are set out in The Russian Commercial and Industrial Bank v. British Bank for Foreign Trade Ltd [1921] 2 AC 438. This case has been referred to in various cases including Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Others (No 2) [1988-89] PNGLR 425; Placer Dome (PNG) Ltd v. Yako (2011) N4691; Independent State of Papua New Guinea v. Central Provincial Government (2009) SC977; Dr. Onne Rageau v. Kina Finance Ltd (2015) N6175 and National Fisheries Authority v. New Britain Resources Development Ltd (2009) N4068
9. The factors are:
a) There must exist a controversy between the parties;
b) The proceedings must involve a right;
c) The proceedings must be brought by a person who has a proper or tangible interest in obtaining the order;
d) The controversy must be subject to the court’s jurisdiction;
e) The defendant must be a person having a proper or tangible interest in opposing the plaintiff’s claim;
f) The issue must be a real one. It must not be merely of academic interest, hypothetical or one whose resolution would be of no practical utility.
10. In the High Court of Australia decision, Ainsworth v. Criminal Justice Commission [1992] HCA 10; (1991-1992) 175 CLR 564, Brennan J. referred to the Russian Commercial case (supra) and said that notwithstanding the wide discretion that exists in deciding whether a declaration should be made, it was not appropriate to grant a declaration if there was no real controversy to be determined.
11. Also, recently, the Supreme Court in considering the issue of standing to seek declaratory orders in Pius Pundi v. Chris Rupen (2015) SC1430 held amongst others that:
“A declaration is a discretionary remedy that should only be granted where there exists a real controversy between the parties to the proceedings, a legal right is at issue, the party seeking it has a proper or tangible interest in obtaining it, the controversy is within the court’s jurisdiction, the defendant has a proper or tangible interest in opposing the plaintiff’s claim and the issues involved are real, and not merely of academic interest or hypothetical.”
12. It has been held to be an abuse of process to seek declaratory relief that will not resolve all of the issues between the parties or relief that will not finally settle the real dispute between the parties: TS Tan v. Elcom (2002) SC683 and the National Court decisions of National Capital District Interim Commission v. Bogibada Holdings Pty Ltd [1987] PNGLR 135 and Ok Tedi Mining Ltd v. Niugini Insurance Corporation and Ors (No. 2) [1988-89] PNGLR 425 and Shengtai Investments Ltd v. Chen Jing (2017) N6753.”
46. His Honour also made similar observations in Amos Ere v National Housing Corporation (2016) N6515 which were adopted by the National Court at paragraph 27 of the judgment.
47. We have earlier observed under the first ground that the appellants are busybodies. The people to complain about or request for the use of the funds really are the “Settler Communities” who are recipients of 2% of the total royalties paid by the State under Clause 3.2(d)(i) of the MOA. There is no controversy between them and the parties to the MOA. The appellants are beneficiaries of 39% of the royalties paid and disbursed in accordance with the formula specified under Clause 3.2(e) of the MOA. The appellants conduct amount to meddling in the affairs and interest of the “Settler Communities” in terms of the use of their funds. They do not have any beneficial interest in the Settler Communities funds as they are specifically allocated to them under Clause 3.2(d)(i) of the MOA. In that context and as canvassed by the National Court at paragraph 30 of the judgment, there is no real controversy between the parties.
48. In the circumstances, we find no error in the finding of the National Court at paragraph 30 of the judgment that there was no real controversy between the parties.
49. Given that, we dismiss this ground as having no merit.
CONCLUSION.
50. All grounds of appeal have been dismissed. Consequently, we dismiss the appeal and refuse all relief sought.
ORDER
51. The orders of the Court are:
1. The appeal is dismissed.
52. ANIS J: The appellants appeal against a final decision of the National Court made on 21 September 2020. The first appellant is the president of the second appellant, Nakuwi Association Inc (the association). The association represents landowners of Nauti, Kuembu and Winima villages. The 3 villages are the landowners of the Hidden Valley Mine which is a gold mine situated in the Wau/Bulolo area of Morobe Province.
53. The mine’s operation began on 4 April 2005 when the State granted a Mining Lease for its operation. Various agreements were signed. Amongst them, was the agreement between the State, the developer Morobe Consolidated Goldfields Ltd (the developer) and the landowners and communities affected called Memorandum of Agreement Relating to the Hidden Valley Gold Project (the project agreement/agreement).
54. The reason why the appellants had commenced proceeding in the National Court is clear which was this. They wanted to utilize, benefit from, and distribute royalty monies which, according to the project agreement, belonged to another group of persons called Settler Communities (the settlers). The appellants and the settlers are recognized beneficiaries under the project agreement. The project agreement states, amongst others, that out of the total royalty monies that are due and payable to the (i), Morobe Provincial Government, (ii), the landowners and (iii) those entitled under the agreement, 2% of the royalties shall be paid by the State to the settlers. The group, settlers, is expressly defined under clause 1 of the agreement to mean “individuals or groups of people that have been granted permissive occupancy by the landowners to occupy and use land within the tenements prior to the commencement of this Agreement”. And payments of their 2% royalties, according to clause 3.3(d) of the agreement, are to be made into a trust account which is to be created by the developer. At this juncture, no trust account has been created, and the settlers’ monies are kept or managed by the developer in consultation with the second respondent and the State. As of March 2020, the settlers’ funds totaled K2,814,691.87. The sum continues to accrue.
55. In dismissing the appellants claim, the trial Judge, amongst others, held that there was no controversy between the parties. I have read my brothers’ decision on this issue, and I agree entirely with their considerations and findings on the matter.
56. The trial Judge also held that the appellants had no proper or tangible interest in obtaining the orders sought. At paragraph 32 of the judgment, the trial Judge said:
“The funds the subject matter of the resolutions belong to the Settler community. The decisions made by the Defendants are for the benefit of the Settler Community and in accordance with the daft trust guidelines. The Defendants have not done any wrong to the Plaintiffs in so far as the disbursement of the Settler Community royalty funds are concerned. The Plaintiffs have no proper or tangible interest in obtaining the orders sought.”
57. When I consider the evidence that was before the trial Judge in the Appeal Book and the submissions made by the appellants before this Court, it is clear to me that real purpose for the appellants going to the National Court was to divert the royalty monies that belong to the settlers as per the project agreement, to other purposes not authorized under the agreement. The settlers were not named as parties at the National Court proceedings, nor have they had any say whatsoever to the ‘controversy’ which appears to have been created solely by the appellants themselves.
58. The question of real or primary interest was not raised separately as a ground of appeal. We have raised the issue directly with counsel for the appellant at the hearing. We queried the appellants’ tangible or primary interest in the matter and asked why is it that the appellants are trying to benefit from or put their hands on something which was and is not theirs. With respect, counsel was unable to meaningfully assist us with this query. The appellants are not the settlers as defined under clause 1 of the project agreement. They have no primary or beneficial interest over the 2 percent royalty payments that belong to the settlers. I uphold the findings of the trial Judge on this matter which is not disturbed by this appeal.
59. I would dismiss the appeal for this reason alone and order cost to follow the event. I have also had the benefit of reading the draft judgment of my brothers. I also agree with their considerations and findings in regard to the grounds of appeal and the orders they propose.
FINAL ORDER
60. The orders of the Court are:
1. The appeal is dismissed.
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Haiara’s Legal Practice: Lawyers for the Appellant
Solicitor-General: Lawyer for the Respondents
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