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Kop v Miningi [2022] PGSC 94; SC2275 (30 May 2022)

SC2275

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]

SCREV 42 OF 2021 (IECMS)

APPLICATION UNDER SECTION 155(2)(b) CONSTITUTION BY:

JACOB KOP
Executive Chairman and Director of Moge
Nambuga Milimb Investment Limited
First Applicant

AND:
MOGE NAMBUGA MILIMB
INVESTMENT LIMITED
Second Applicant

AND:
MALIS MININGI
Deputy Registrar of Companies
First Respondent

AND:
HARRIET KOKIVA
Registrar of Companies
Second Respondent

Waigani: Hartshorn J
2022: 11^th, 30^th May

SUPREME COURT – practice and procedure - Application for leave to review pursuant to s. 155(2)(b) Constitution –decision concerning vesting of shares owned by nine companies subsequently deregistered, in Acting Registrar of Companies

Cases Cited:

Avia Aihi v. The State (No.2) [1982] PNGLR 44
Application by Anderson Agiru (2002) SC686
Application by Herman Leahy (2006) SC855
Application by John Maddison and Bank of South Pacific Ltd (2009) SC984
Alphonse Tay v. Newcombe Gerau (2011) SC1097
Lae Bottling Industries Ltd v. Lae Rental Homes Ltd (2011) SC1120
State v. Toka Enterprises Ltd (2013) SC1266
Luke Marano v. Jack Nouari (2013) SC1307
Benjamin Sengi v. The State (2015) SC1425
Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568

Counsel:

Mr. H. Pora, for the Applicants
Mr M. Miningi in person
Mr T. Sausia, for the Second Respondent

Oral decision delivered on
30^th May 2022

1. HARTSHORN J: This is a decision on a contested application for leave to review a judgment of the National Court (Judgment) pursuant to s.155(2)(b) Constitution. The Judgment was delivered on 28^th September 2021.

2. Leave is required as the right of appeal was not exercised in the time permitted by statute: Order 5(1) Supreme Court Rules and Avia Aihi v. The State (No.2) [1982 PNGLR 44]; Application by Anderson Agiru (2002) SC686; Application by Herman Leahy (2006) SC855; Application by John Maddison and Bank of South Pacific Ltd (2009) SC984; Alphonse Tay v. Newcombe Gerau (2011) SC1097 and Benjamin Sengi v. The State (2015) SC1425.

3. Where a right of appeal has not been exercised, three criteria must be satisfied before leave can be granted (refer to the cases cited above). These are:

a) it is in the interests of justice to grant leave; and

b) there are cogent and convincing reasons and exceptional circumstances, eg. some substantial injustice is manifest or the case is of special gravity; and

c) there are clear legal grounds meriting a review of the decision.

4. In Southern Highlands Provincial Government v. Ronald Kalu (2016) SC1568, Injia CJ (as he then was) said at [5]:

“The criteria for grant of leave for review is settled in various decisions of this Court: Lae Bottling Industries Ltd v Lae Rental Homes Ltd (2011) SC1120, State v Toka Enterprises Ltd (2013) SC1266, Luke Marano v Jack Nouari (2013) SC1307. The applicant must have standing to bring the application. If the applicant is a party in the proceedings of the court below from which the judgment under review was given, the question of standing does not arise. The applicant must offer a reasonable explanation as to why an appeal against the judgment was not filed within time. The application for leave for review must not be delayed. If there has been a delay in lodging the application, a reasonable explanation must be given. The application must be prosecuted promptly. If there has been a delay in prosecuting the application, a reasonable explanation must be offered. If the court finds that there has been a delay and no reasonable explanation has been offered for the delay in lodging and prosecuting the application, the court may, nonetheless, grant leave for review if there are exceptional circumstances showing manifestation of substantial injustice that give rise to serious issues of facts or law that warrants a full review of the judgment. It is also necessary for the applicant to demonstrate that it is in the interest of justice to warrant a review of the judgment.”

Background

5. The Judgment, amongst others ordered that:

1. a certain number of shares of nine named deregistered companies are vested in the Acting Registrar of Companies, the applicant in the National Court proceeding, by operation of law and that;
   
2. pursuant to s.396 (2) Companies Act certain forms are void and illegal and struck off the Register.
   

6. The relief in the National Court was sought by the Acting Registrar of Companies and was:

1. in respect of shares of nine deregistered companies. These shares are shares in Moge Nambuga Milimb Investment Limited (Monamil) which were held by the nine companies – those nine companies now being deregistered;
   
2. for certain forms registered by the Acting Registrar of Companies after the 17^th January 2020 to be declared void and illegal and struck off the Register. From a perusal of the affidavit of Malis Miningi filed 9^th March 2021, these forms were lodged to make changes in respect of directors and the ownership of shares in Monamil;
   

100. for relief in respect of the Board of Monamil and money payable to Monamil. This relief sought was later withdrawn with leave of the National Court.
     

7. This application for leave to review is brought by Jacob Kop as Executive Chairman and as a director of Monamil and is also brought by Monamil. Both applicants claim to be affected by the Judgment and to have an interest in bringing this review.

Standing

8. The respondents submit that the applicants do not have the requisite standing or locus standi to bring this application for leave to review. As Injia, CJ said in Southern Highlands Provincial Government v. Ronald Kalu (2018) SC1568:

“The applicant must have standing to bring the application (for leave to review). If the applicant is a party in the proceedings of the court below from which the judgment under review was given, the question of standing does not arise.”

9. In this instance the applicants were not parties in the proceeding below and so the question does arise. The applicants must have standing to bring this application.

10. The respondents submit that the first applicant does not have standing as he was not a party in the National Court proceeding from which this application emanates, he was not a shareholder or director of the nine deregistered companies, there is no board resolution of Monamil authorising him to file the application on behalf of himself or Monamil, the judgment the subject of this application does not affect the first applicant’s standing in Monamil and no relief was sought or granted against the first applicant in the National Court proceeding.

11. The respondents submit that the second applicant, Monamil does not have standing as the relief that would have affected Monamil was abandoned and not sought. No other relief was sought or granted against Monamil and there is no board resolution of Monamil authorising the filing of this application.

12. The applicants submit that they do have standing as the first applicant is a director of Monamil, the shares of the nine deregistered companies in Monamil are the subject of the National Court proceeding and this application, and initially, relief sought in the originating summons, which was abandoned later, did concern Monamil. Further, there is another National Court proceeding in which amongst others, declaratory relief is sought concerning the shareholding of Monamil, that the ten companies which hold the shares in Monamil, hold these shares in trust for 486 alleged shareholders, that a management committee appoints directors of Monamil and not the ten companies which hold shares in Monamil and that the Registrar of Companies should transfer these shares in Monamil to the 486 alleged shareholders or persons nominated by the said management company.

Consideration re standing

13. The status of the other National Court proceeding referred to by the applicants according to submissions from counsel is that an application for interim relief was made, that the Court reserved its decision and has not yet delivered its decision. I proceed therefore, on the basis that no orders have been made in that proceeding at the date of the hearing of this application. Relief has been sought, but no orders have been made.

14. As to the standing of the first applicant, on the evidence before the court, including the first applicants’ evidence, the first applicant was not a director or shareholder of any of the nine deregistered companies. In the Judgment no relief was granted against the first applicant. The first applicant also does not dispute that the nine subject companies were and are deregistered. There is not in any evidence any board resolution of Monamil authorising the first applicant to commence this proceeding on behalf of himself or Monamil. That the first applicant has commenced OS 400 of 2020 as one of the first plaintiffs with and in respect of Monamil does not provide him with any standing in this application.

15. Consequently, for the above reasons, I am not satisfied that the first applicant has the requisite standing or locus standi to bring this application for leave to review.

16. As to the standing of the second applicant, Monamil. As to the relief that was claimed, which concerned Monamil, that relief was abandoned. As a consequence, there is no relief which was granted against, or which affects Monamil which could bestow standing. Further, there is no evidence of any board resolution of Monamil authorising the commencement of the proceeding on its behalf. Moreover, the relief granted in the Judgment concerns amongst others the shares of the nine deregistered companies in Monamil and not Monamil per se.

17. In regard to the forms that have been struck off the Register which concern Monamil, again there is no evidence of any board resolution of Monamil authorising the commencement of proceedings on its behalf.

18. Consequently, I am not satisfied that Monamil has the requisite standing to bring the application for leave to review.

19. Given the above, as both applicants do not have the requisite standing to bring the application for leave to review it should be dismissed. Notwithstanding this finding, I consider the application further.

Consideration

20. Having regard to the comments of the former Chief Justice in Southern Highlands Provincial Government v Ronald Kalu (supra), I consider whether there are exceptional circumstances showing a manifestation of substantial injustice that gives rise to serious issues of fact or law which warrant a full review of the Judgment.

21. The applicants in their application for leave to review refer to five questions which I assume are proposed grounds, which I briefly consider:

a) whether it was proper to proceed ex parte and without service of process on Monamil and its directors - First, from the evidence, the relevant documents were served at the office of the lawyer for Monamil in other matters. That counsel for the applicants informed that his instructions were not to accept service, assumes that he must have brought the proceeding to the attention of Monamil so that he received those instructions. In any event, as I have found that the applicants do not have the requisite standing and no relief was made against them, service upon them of the originating process was not necessary.

b) whether non-disclosure of OS 400 of 2020 to the National Court amounts to an abuse of court process and a perversion of the course of justice - First, no orders have been made in OS 400 of 2020 which prevented the National Court from proceeding with the hearing from which this application for leave to review emanates. Second, it is not in dispute that the nine deregistered companies were deregistered before both National Court proceedings were commenced. Third, there is no transcript before this Court from which the Court may be able to determine whether in fact OS 400 of 2020 was disclosed to the primary judge. Fourth, even if the nine deregistered companies held the shares in trust for others, the vesting of shares in the Registrar of Companies, does not defeat that trust and the Registrar of Companies holds the shares as trustee for the beneficiaries of such trust. I mention further, that in regard to the purported changes made to Monamil by the forms which were struck off the Register by the Judgment, apart from the purported transfer of shares of Wilya Limited in Monamil, all of the other transfers concerned shares held by the nine deregistered companies. It is not disputed that at the time of this purported transfer of shares, the nine companies were deregistered. No one has the power to transfer the assets of a deregistered company apart from the Registrar of Companies pursuant to the Companies Act. As to the purported changes of directors in Monamil by the forms, after the deregistration of the nine companies, 90% of the shares in Monamil are vested in the Registrar of Companies. The purported appointment and removal of directors could not have validly occurred without the approval of the Registrar of Companies.

c) whether the subject shares are held in trust – I have already considered this issue in the last question.

d) whether a failure to serve a Court order within forty days is proper - even if there was no or inadequate service as alleged, this does not affect the Judgment.

e) Given the above, questions e) and f) in my view are not relevant for the purposes of this application.

22. Consequently, I am not satisfied that the applicants have demonstrated that they have an arguable case on any of the proposed grounds in the application for leave to review. Even if arguable grounds have been established and for present purposes only, I will assume that an arguable case has been established, the test is whether there are exceptional circumstances showing a manifestation of substantial injustice that gives rise to serious issues of fact and law. This has not been shown in this application or the proposed grounds contained therein. I am not satisfied that any prejudice has been shown in respect of the applicants.

23. Following a consideration of the documentation before the court and the submissions made, I am not satisfied that in this instance there are any exceptional circumstances or the specific exceptional circumstances as described by Injia CJ (as he then was) in Kalu’s case (supra). This is not a test case and no particular circumstances exist which require this court’s determination on a new or novel point of law.

24. I am also satisfied that it has not been shown to be in the interests of justice that leave to review be granted. The application for leave to review should be dismissed. Given the above, it is not necessary to consider the other submissions of counsel.

Orders

25. It is ordered that:

a) The application for leave to review filed 8^th December 2021 is dismissed.

b) The applicants shall pay the costs of the respondents of and incidental to the said application for leave to review.
__________________________________________________________________
Pora Lawyers: Lawyers for the Applicants
Investment Promotion Authority In-house Lawyers: Lawyers for the Respondent