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Potabe v Yangale [2021] PGDC 169; DC7025 (22 November 2021)

DC7025

PAPUA NEW GUINEA

IN THE DISTRICT COURT OF JUSTICE

CIVIL JURISDICTION

CV NO. 113 OF 2021

Between:

MATIABE POTABE and FABIAN TINDIPE of Tiya Pu’u Clan in Benaria Area of the PNGLNG Project’s Pipeline Segment Two (02)

Complainants

And:

KOLI YANGALE of Tiya Polake Clan in Benaria Area of the PNGLNG Project’s Pipeline Segment Two (02)

First Defendant

And:

BOI MANGE of Tiya Polake Clan in Benaria Area of the PNGLNG Project’s Pipeline Segment Two (02)

Second Defendant

And:

JEFFEREY MANGE of Tiya Polake Clan in Benaria Area of the PNGLNG Project’s Pipeline Segment Two (02)

Third Defendant

And:

BRANCH MANAGER OF BANK SOUTH PACIFIC LIMITED, TARI BRANCH

Fourth Defendant

His Worship Mr. E. Komia

22^nd November 2021

CUSTOMARY LAW – claim for unfair payment of equity and royalty – fraud and misrepresentation by defendant – orders seeking to rectify errors and ommissions in a ministerial declaration – power lies with the national court for judicial review – time barred for application for judicial review – evidence establish identifiable errors and ommissions – rectification of ministerial determination cannot be done by district court – jurisdiction for interests concerning customary land vested in the local land mediation and local land court – matter referred to local land mediation to ascertain customary ownership and interest status – such determination to be used and forwarded to minister for consideration to rectify initial ministerial determination.

FRAUD AND MISREPRESENTATION – any litigant pleading fraud must particularise fraud – mere allegations on fraud renders claim incompetent – particulars of fraud must be backed by substantive evidence – claim for fraud dismissed due to lack of particulary in pleadings.

DISTRICT COURTS POWERS – district courts powers – s.22 gives power to the district courts to make orders in the interest of justice – where circumstances arising out of the court proceeding requires such orders, s.22 of District Courts Act is invoked.

Held:

1. The District Courts have powers under s.22 of the District Courts Act to make any other orders to fit the circumstance of the case and do justice in circumstances that the court is presented with at the time of the decision.
   
2. Whilst the District Courts do not have the jurisdictional basis to review any decision of the Minister for Petroleum in terms of a determination made for benefit sharing; where there is an indetifiable error that needs to be corrected in relation to customary interests, and the evidence is overwhelming, the District Courts when faced with such cases must refer the matter for the local land mediation to deal with that matter to establish the interest of a disputing clan in a court proceeding concerning rights, interests, and benefits arising from the customary land, pursuant to s.22 of the District Courts Act.
   

Papua New Guinea cases
Pelego v Pok [2021] PGNC 50; N8745
Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178; N2603
Hi Lift Company v Miri Sata and Another N2004
Emas Estate Development Pty Ltd v John Mea and Others [1993] PNGLR 215;
William Maki v Michael Pundia and PNG Motors [1993] PNGLR 337,
Steamships Trading Company Ltd v Minister for Lands and Physical Planning and Others N1959

Overseas Cases

Conlan and Others v Registrar of Titles and Others [2001] WASC 201; (2001) 24 WAR 299,
Assets Company Ltd v Mere Roihi and Others [1905] A.C 170,

Legislations

Oil and Gast Act 1998

District Courts Act

Counsels:

Complainant: in person

First Defendant: in person

Second Defendant: in person

Third Defendant: in person

Fourth Defendant: in person

INTRODUCTION

1. The complainants in this proceeding claim that the defendants being the spokespersons for the entire Tiya Clan failed to ensure that the whole Tiya Clan benefitted properly, but rather misrepresented the other sub clans of Tiya Clan only ensured that their subclan of Polake was given emphasis.
   
2. The complainants sought in their substantive remedies, interim restraining orders against the first three defendants, and against the fourth defendant from facilitating any transactions by the three defendants. They also seek costs, and any other orders this court deems appropriate and just in its circumstance.

BRIEF FACTS

3. The two complainants are leaders of the Tiya Pu’u clan of the Tiya tribe, whilst the first, second and third defendants are leaders of the Tiya Polake clan of the Tiya tribe along the Papua New Guinea Liquified Natural Gas (PNGLNG) Project’s Pipeline Segment Two (02) corridor in Benaria area, in Hulia Local Level Government Council, in the Komo Margarima Electorate of Hela Province.
   
4. Between 2017 and 2018, the Department of Petroleum and Energy conducted a clan vetting exercise to identify and determine the clans that were directly affected by the PNGLNG Projects gas fileds and pipeline areas in order to ensure that the affected clans and their members be adequately compensated through the royalty payments.
   
5. One of the affected clans was Tiya tribe, which the complainant and the first three defendants all originate from. During the clan vetting exercise, Tiya tribe was represented by the defendants, and the complainant.
   
6. During the clan vetting, the second and third defendants stood out to be the leaders of Tiya Clan, and all the members of the Alo clan, Pu’u clan, and Polake clan rallied behind the second and third defendant for the greater interest of the Tiya Tribe.
   
7. The list of the identified clans of the Benaria Pipeline Two (2) Segment, was published on the National Gazette No. G358 dated, 04^th June 2018. In the gazettal notice, it was determined that the Tiya Polake clan were entitled to a 13.64 percent of the royalty and equity benefits, whilst the Tiya Pu’u clan were entitled to 1.13 percent of the royalty and equity benefits. Tiya Alo was never identified as a beneficiary clan.
   
8. On 12^th August 2021, the Department of Petroleum and Energy, along with the Managing Director for Mineral Resources Development Company, accompanied by the Governor of Hela Province, and Gulf Province went into Beneria and officially made the payments for the royalties and equity benefits for the pipeline segment landowners. It was during that time, the Tiya Pu’u clan noted that they had been paid little, compared to the Tiya Polake clan who were paid more money.
   
9. This proceeding was then filed to challenge the percentage determination by the Department of Petroleum and Energy.
   

EVIDENCE

10. The evidences of the complainants and the defendants are summarized in the table below.

OVERVIEW OF THE PROCEEDING

11. For now, this court is faced with the task of deciding the dispute between the complainant and the defendant on the percentage allocated to them by the minister in the ministerial determination made on Monday, 04^th of June 2018, gazette no. G358 for the PNGLNG Pipeline License Four (PL No.4) Segment Two (2). Initially the proceeding looked to be centred around obtaining permanent restraining orders, but as the matters were mentioned on various mention dates, it became clear that the complainants were disputing the allocation made by the minister, under the ministerial determination of 04^th June 2018 under section 169 of the Oil and Gas Act.
    
12. The complainants further allege that the defendants fraudulently tampered and influenced the LOBID teams investigation and recommendations and as such, their benefits have been greatly reduced whilst their brother clan Tiya Polake has been awarded a very high percentage. This brings the issue of fraud to now form part of the proceeding.
    

FRAUD

13. The courts in the common law jurisdiction, and our jurisdiction have repeatedly stated in various cases that, a claimant who is pleading fraud must particularise the fradudulent act, and effectively substantiated the pleadings with credible and sufficient evidence.
    
14. In the case of Papua Club Inc v Nasaum Holdings Ltd [2004] PGNC 178; N2603 Gavara Nanu (J) made reference to the cases of Assets Company Ltd v Mere Roihi and Others [1905] A.C 170, Conlan and Others v Registrar of Titles and Others [2001] WASC 201; (2001) [2001] WASC 201; 24 WAR 299, Emas Estate Development Pty Ltd v John Mea and Others [1993] PNGLR 215; Steamships Trading Company Ltd v Minister for Lands and Physical Planning and Others N1959 and Hi Lift Company v Miri Sata and Another N2004 and distinguished those case. His Honour then went on to apply the principles in the case of William Maki v Michael Pundia and PNG Motors [1993] PNGLR 337, and stated that;
    

“Allegations of fraud is a very serious allegation thus, the particulars of fraud must be pleaded and fraud must be strictly proven by the plaintiff as required under Order 8 r 30 of the National Court Rules. In this case, the particulars of the alleged fraud not having been pleaded, the plaintiffs claim of fraud against the defedants must fail.”

15. Consequently, despite the fact that the complainants are claiming fraud on the part of the defendant, I am not convinced that the pleadings plead fraud. There is also lack of necessary evidence to substantiate that claim. As such, this claim for fraud must fail.
    

CLAN VETTING OR LANDOWNER IDENTIFICATION STUDIES, AND MINISTERIAL DETERMINATION ON BENEFIT SHARING

16. In relation to the issue of the complainants argument that the Tiya Pu clan being unfairly compensated, and that the benefits have been given to Tiya Polake despite them having equal and considerable customary rights, and interest, I have taken some time to look at the evidences put forward by both parties and their submissions, which both parties made at length during their submissions. I understand that the complainants claim is fundamentally challenging the allocation of the percentage, and further allege that the defendants had an upper hand as they knew the DPE official and since they were longtime residents of Moro, they had established connections to push Tiya Polake’s agenda ahead of Tiya Pu’u’s interest. The complainants further submit that they (Tiya Polake and Tiya Pu’u) had equal ownership, and why would Tiya Polake be recognized as the principle landowner.
    
17. The defendants in their submissions submitted that the identification of clans and awarding of percentage is made by DPE and they donot have any say in any manner whatsoever to influence their findings. It is improper for the complainants to sue them. The complainants should instead sue the Department of Petroleum, and the Mineral Resources Development Company Ltd if they are aggrieved with the determination which was made pursuant to the findings of DPE through the clan vetting. And landowner identifications studies.
    
18. I find both arguments compelling. Nevertheless, it is important for me to properly understand the process and guidelines for clan vetting, landowner identification and the benefit sharing regime under the relevant legislation, so as to give this court a clear sense of direction regarding this case.
    
19. Clan vetting and landowner identification is a condition precedent in any petroleum project, before any petroleum development license is awarded. That responsibility is placed on the licensee, under s.47 of the Oil and Gas Act 1998. It is the pursuant to that identification that the minister for petroleum then considers and makes determination on the benefit sharing of the project to the various landowning clans that haven been identified.
    
20. In the case of Pelego v Pok [2021] PGNC 50; N8745 His Honor Makail J succinctly summarised by stating that the ministerial determinations are done with or without the social mapping. This means that whilst there may be no proper information available to the minister at the time of the determination, the minister may proceed to make determinations pursuant to s.169 of the Oil and Gas Act.
    
21. So essentially the minister made a determination for the percentage breakup for the Tiya Polake and Piya Pu’u clans. That determination was open to challenge within twenty eight (28) days after the determination was made on on 30^th May 2018, and published on 04^th June 2018. Sections 169, 169A, 170 and 171 of the Oil and Gas Act 1998 states:
    

169. Identification of landowner beneficiaries.

(1) Notwithstanding any other provision of this Act, the persons (other than affected Local-level Governments or affected Provincial Governments) who shall receive the benefits granted by Sections 167 and 168 shall be identified in accordance with this section.

(2) Prior to convening or during a development forum under Section 48, the Minister shall determine, by instrument—

(a) the persons (other than affected Local-level Governments or affected Provincial Governments) who shall receive the benefits granted by Sections 167 and 168; and

(b) the incorporated land groups or, if permitted in accordance with Section 176(3)(f), any other persons or entities who shall represent and receive the benefit on behalf of the grantees of the benefit.

(3) An instrument under Subsection (2) shall only be valid if also signed by the Director and the Secretary of the Department of Treasury or other National Government Department responsible for financial matters.

^[1]

(4) In making a determination under Subsection (2), the Minister shall consider any agreements by persons who are or claim to be project area landowners, the decisions of courts of Papua New Guinea as to ownership of land or rights in relation to land in the vicinity of the petroleum project in question, the results of social mapping and landowner identification studies carried out in accordance with this Act, and submissions from affected Local-level Governments or affected Provincial Governments of the petroleum project in question or from any other person claiming an interest or to be affected by the decision of the Minister.

(5) A petroleum development licensee or applicant for a petroleum development licence may, at any time after an application for the grant or variation of a petroleum development licence in respect of a petroleum project, apply to the Minister for a determination under Subsection (2).

(6) Where a licensee or an applicant for a licence applies to the Minister for a determination under Subsection (5), the Minister shall allow a period of 30 days, or such longer period as the Minister may allow, for persons referred to in Subsection (4) to make submissions or in the case of persons claiming to be project area landowners to advise him of agreements reached by them on the determination.

(7) Where a dispute exists as to which persons or incorporated land groups or other entities should be identified to receive benefits in accordance with this section, the Minister may make a determination under Subsection (2) or may direct that monies or other benefits which are the subject of the dispute shall be held in abeyance pending a resolution of that dispute by other means, and where such a direction is given by the Minister the trustee referred to in Section 176 shall hold such monies or other benefits in accordance with that direction.

(8) Where the Minister directs that monies or other benefits are to be held in abeyance under Subsection (7) or where the Minister's determination under Subsection (2) is subject to judicial review, the Minister may grant the licence or licences in respect of the petroleum project.

^[1](9) Where the Minister has granted the licence or licences under Subsection (8) and the dispute is resolved the Minister shall make a determination under Subsection (2) and convene a development forum under Section 48.

(10) A Ministerial determination made pursuant to the section shall not be reviewable before any court unless an application for review is made within 28 days of the Ministerial determination.

169A. Identification of ^[1]landowner beneficiaries and sharing of benefits in relation to existing petroleum projects.

(1) If in respect of petroleum projects which on the commencement date are in production or have commenced development, persons or incorporated land groups or other entities, who should be receiving benefits from such petroleum projects, have not been identified or where a dispute exists as to which persons or incorporated land groups or other entities should be identified to receive such benefits, the Minister may make a determination as to the persons or incorporated land groups or other entities who should receive the benefits arising from such petroleum project.

(2) In making a determination under Subsection (1), the Minister shall consider any agreements by persons who are or claim to be project area landowners, the decisions of courts of Papua New Guinea as to ownership of land or rights in relation to land in the vicinity of the petroleum project in question, the results of social mapping and landowner identification studies that have been carried out in accordance with this Act, and submissions from affected Local-level Governments or affected Provincial Governments of the petroleum project in question or from any other person claiming an interest or to be affected by the decision of the Minister.

(3) Where, in the opinion of the Minister, having considered any agreements by persons who are or claim to be project area landowners, the decisions of courts of Papua New Guinea as to ownership of land or rights in relation to land in the vicinity of the petroleum project in question, the results of any social mapping and landowner identification studies that have been carried out in accordance with Section 47, some project area landowners have a greater or more substantial occupation or right of occupation of the land referred to in the definition of "project area landowners" or are more adversely impacted by the petroleum project than other project area landowners, the Minister may, by instrument, determine that the sharing amongst project area landowners of equity benefits or royalty benefits in accordance with this section shall favour, on a per capita basis, those project area landowners who have that greater or more substantial occupation or right of occupation or are more adversely impacted by the petroleum project.

170. Sharing of benefits amongst project area landowners.

(1) Any equity benefit or royalty benefit granted to project area landowners shall be shared amongst project area landowners in accordance with this section.

(2) Equity benefits and royalty benefits granted to project area landowners under this Act shall be shared among project area landowners or groups of project area landowners in proportions to be agreed by them in a development agreement, but in default of such agreement in the proportions determined by the Minister, by instrument.

(3) Where, in the opinion of the Minister, having considered the results of social mapping and landowner identification studies conducted in accordance with Section 47, some project area landowners have a greater or more substantial occupation or right of occupation of the land referred to in the definition of "project area landowners" or are more adversely impacted by the petroleum project that other project area landowners, the Minister may, by instrument, determine that the sharing amongst project area landowners of equity benefits or royalty benefits in accordance with this section shall favour, on a per capita basis, those project area landowners who have that greater or more substantial occupation or right of occupation or are more adversely impacted by the petroleum project.

(4) A trust deed implemented in accordance with ^[1]Section 176(3) shall provide for the distribution of equity benefits and royalty benefits in accordance with this section.

171. Other project area landowner benefits.

(1) Subject to Section 174 the State may, in a development agreement, reach agreement with project area landowners to provide and may provide to or for the benefit of project area landowners or the people of the project area or the people of the region, by way of grants out of consolidated revenue or otherwise, such other benefits in addition to those specified in this Part as the State sees fit.

(2) Nothing contained in this Part affects any agreement which might be reached between project area landowners and the developers of a petroleum project as to benefits to be provided or other commitments made to those project area landowners by those developers.

22. Now, reading through these provisions within the Oil and Gas Act 1998, I raise the following question of law, which is that, if the minister was not enlightened on any agreement or decision of any courts that determined the ownership, which would then directly go to affect his determination pursuant to the provisions, or if the parties have entered into an agreement or consensus on the ownership and percentage distribution after the determination, what would be the effects of it, and how would the minister correct his error or oversight? That to my mind is not expressly stated in the Act. I believe that would call for a second determination to be made, which would then rectify the initial error or oversight.
    
23. Whilst I am entitled to make criticism such as the above, I am weary of the fact that, often times, the amendments and recitifications to the initial determination is often overlooked and not given effect for quite some time, which can also be frustrating and painstakingly long for the poor landowners.
    
24. Nevertheless, in this case, the complainant has not filed the proceeding within the twenty eight days required under the Act for the review of the determination. As a matter of law, this court also lacks the jurisdiction to deal with matters concerning review of a ministerial determination under Act, as the determination is open to challenge only in the national court by way of a judicial review application. This court would only be able to identify the issue as being an issue of ownership and the clans boundary locations so as to determine which clan receives what portion and for those determinations to be then forewarded to the minister for petroleum to make the necessary amendments to the initial determination.
    
25. I find it quite intriguing that whilst there was an agreement held in 2015 which followed on in 2019 between the complainant and defendants’ clan agreeing to own equal portions of the land along the pipeline licence four (PL No.4) segment two (2) corridor, the ministerial determination tends to show that the complainants clan are entitled to 1.13 percent of the benefit, and the defendants clans are entitled to 13.64 percent of the benefits.
    
26. That to my mind is not proper, and I am of the view that the minister may have been either misled, or ill informed of the percentage of ownership between the two clans, thereby resulting in the determination, which consequently attracted disputes between the two clans, leading onto this proceeding. The complainants in their claim dispute the 13.64 percent awarded under the ministerial deterimination. It surely establishes that there is now a dispute with the Tiya Pu’u and Piya Polake clan on who owns how much of the land within the pipeline license four (PL No.4), segment two (02) of the PNGLNG project pipeline along the Benaria Area.
    
27. That essentially brings us to the fundamental question that whilst there is no court determination on the percentage of ownership, and the agreement between landowners tend to establish a fifty-fifty ownership of the pipeline corridor between Tiya Pu and Tiya Polake clans well after the ministerial determination had been made, how can this court settle the current dispute?
    
28. The only proper avenue would be for this court to revert the matter back to the local land mediators at the land court to either confirm or disprove the ownership and portion of land owned by each of the disputing clan, which are the Tiya Polake and Tiya Pu’u, and basing on those findings, this court can then confirm those findings and forward those findings to the minister to then make alterations or necessary amendments to the determination that he has already made.
    
29. I also note from the pleadings that the orders sought by the complainant tends to seek restraining orders against the defendants from accessing the benefits until such time the issue of ownership is determined, and that in itself is enough to be the substantive remedy. But the problem posed by that order would be that the order would be for an indefinite period, and most times such proceedings are delayed and makes the dispute cumbersome and convoluted with one issue after another. I do not intend to let it be so, as proceedings adjourned sine die do not get resurrected and determined that easily.
    
30. Section 22 of the District Courts Act gives powers to the District Courts to make any other orders that are necessary for the interest of justice, and I cite that provision herein:
    

22. General ancillary jurisdiction.

Subject to this Act, a Court as regards a cause of action for the time being within its jurisdiction, shall, in proceedings before it—

(a) grant such relief, redress or remedy, or combination of remedies, whether absolute or conditional; and

(b) give the same effect to every ground of defence or counterclaim, whether equitable or legal,

as ought to be granted or given in a similar case by the National Court and in as full and ample a manner.

31. I am fortified in my view that I have the jurisdictional basis to make orders for the purposes of addressing the issues beforehand. Whilst the power to review the ministerial determination as per s. 168 of the Oil and Gas Act 1998 lies with the National Court, I cannot simply dismiss this proceeding and let an unnoticed error go uncorrected because mere ignorance of those glaring errors will have immense impact on peoples livelihood and the project security in the long run.
    
32. Finally, I have to deal with the interim orders that I had made concerning the restraining orders I issued earlier regarding Tiya Polake’s account. It is trite law that granting of interim orders and extension of any interim order is a matter of discretion. In deciding whether to extend or set aside an interim order, the court considers the following matters:
    
    1. Has there been any change in the circumstance since the orders have been granted which render the continuation of the orders unnecessary?
    2. What has been the conduct of the parties since the earlier orders were made?
    3. Are there previously undisclosed relevant facts, which have been discovered since the interim orders were made?
       

See the cases of Ekepa v Gaupe [2004] PNGLR 22, Golobadana No.35 Ltd v Bank South Pacific Ltd (2002) N2309

33. In considering the above three factors, I note that there has been no change to the circumstance since the orders were granted, and the parties conduct have not changed. Parties are both landowning clan members and have been attending to court without any alterations in their conduct. I am also satisfied that there are no oother facts that have been disclosed to this court so as to render the conduct of the complainants to be coming to this court with undisclosed facts.
    
34. I will therefore in the exercise of my discretion allow the interim orders to be as it is until the customary land boundary determination is made by the local land mediation.
    

CONCLUSION

35. I will therefore conclude that it is therefore only proper for this court to make certain orders in form of directions so that parties can comply with it, and to have this matter returned before me expeditiously, for purposes of closing this case.
    
36. The Court Orders that;
    
    1. Pursuant to S. 22 of the District Courts Act, this matter is now referred to the Local Land Mediation Court for the local land mediators to deliberate, identify and determine the ownership and percentage of ownership belonging to the Tiya Pu’u and, Tiya Polake clans respectively for their land located within the Pipeline License Four (PL No.4) Segment Two (2), in Benaria Area of the PNGLNG Project.
       
    2. Pursuant to s.22 of the District Courts Act, this court orders the Manager for Hela Provincial Administration’s Local Land Mediation Division, Mr. Henry Gaialu to make the necessary administrative arrangments and appoint three (3) local land mediators to mediate over the matter between the Tiya Pu’u and Tiya Polake clans, and this mediation shall take place within the next thirty (30) days.
       
    3. Pursuant to s.22 of the District Courts Act, the findings of the local land mediation shall be brought into this court for the court to make its final orders with respect to the closing of this case, and such findings shall be made by or before the 21^st of December 2021.
       
    4. This matter shall return before this court on 22nd December 2021 at 9:30am.
       
    5. The interim orders shall remain until further orders of this court.
       
    6. Cost is in the cause.
       
    7. Time is abridged.

By the Court.

Magistrate E. Komia