Nimamar Rural Local Level Government v Thomas Tanasu, Mark Soipang & Robert Kiapsasieth as Board of Directors of Mineral Resources Lihir Limted. and Mineral Resouces Lihir Limited and Agorlam Limited (2009) N3758

• Jurisdiction: Papua New Guinea
• Judge: Lenalia J
• Judgment Date: 02 September 2009
• Court: National Court
• Citation: (2009) N3758
• Year: 2009
• Judgement Number: N3758

Full Title: Nimamar Rural Local Level Government v Thomas Tanasu, Mark Soipang & Robert Kiapsasieth as Board of Directors of Mineral Resources Lihir Limted. and Mineral Resouces Lihir Limited and Agorlam Limited (2009) N3758

National Court: Lenalia J

Judgment Delivered: 2 September 2009

N3758

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

O.S.NO. 724 OF 2008

NIMAMAR RURAL LOCAL LEVEL GOVERNMENT

Plaintiff

AND:

THOMAS TANASU, MARK SOIPANG & ROBERT KIAPSASIETH AS BOARD OF DIRECTORS OF MINERAL RESOURCES LIHIR LIMTED.

First Defendant

AND:

MINERAL RESOUCES LIHIR LIMITED

Second Defendant

AND:

AGORLAM LIMITED.

Third Defendant

Kokopo: Lenalia; J

2009: 20th March & 2nd September

PRACTICE & PROCEDURE – Purpose of order under O.3 of National

Court Rules – Access to information that may lead to proceedings against third party.

PRACTICE & PROCEDURE – Application to dismiss for no reasonable

cause of action – Frivolous and vexatious proceedings – Application to dismiss granted.

Cases cited:

Papua New Guinea Cases

PNG Forest Products Ltd & Inchape Berhard v Minister for Forests & The State and Genia [1992] PNGLR 85

In The Matter of The Lawyers Act 1986 and In the Matter of an Application by Peter Norman Moore [1993] PNGLR 470.

Ronny Wabia v BP Exploration & Operating Co. Ltd. [1998] PNGR 8

Odata Limited v Ambusa Copra Oil Mill Limited and National Provident Fund Board of Trusties (6.7.01) N2106.

Overseas cases

Hubbuck & Sons Ltd v Wilkinson Heywood & Clark Ltd (1899) All ER 244

Grierson v The King (1938) CLR 431

Counsels

Mr. D. Awaita, for the Respondent/Plaintiff

Mr. P. Kuman, for the Applicant/Defendants.

2nd September, 2009

1. LENALIA; J. On 22nd March 2009, this Court heard two applications on Notices of Motions. The first one was the application by the defendants’ lawyer to dismiss the proceedings as it does not disclose any reasonable cause of action. That Motion was moved pursuant to O.12 R.40 of the National Court Rules. The second application was the one by Mr. Awaita of counsel for the Plaintiff filed 16th March 2009 seeking orders to set aside the ex parte orders dated 11th March this year.

2. The Defendants’ Cross Notice of Motion filed 6th of the same month was first argued. The Defendants seek the following orders in the Notice of Motion:

1. Time be abridged pursuant to Order 1 Rule 15(1) of the

National Court Rules and this Notice of Motion be heard

forthwith.

2. The exparte orders of 5th March 2009 be set aside

immediately.

3. The entire proceedings be dismissed for non discloser of a

reasonable cause of action and or for abuse of process and

or frivolity and or vexatiousness pursuant to Order 12

Rule 40 of the National Court Rules.

4. Alternatively the entire proceedings be dismissed on the

basis of lack of standing/locus standi and therefore making

the proceedings an abuse of process and frivolous and

vexatious pursuant to Order 12 Rule 40 of the National

Court Rules.

5. The Amended Notice of Motion dated 23rd February 2009

(Document No.10) be dismissed and struck out as being an

abuse of process pursuant to Section 155(4) of the

Constitution.

6. Pursuant to Section 155(4) of the Constitution a

Permanent injunction be issued against the Plaintiff and

Rudolf Tongop and Menom L Baric from harassing,

Interfering and disturbing the Defendants from performing

and doing their lawful business and operations and other

commercial activities within Papua New Guinea.

7. Costs on Solicitor/Client basis.

3. The court heard arguments on both the Amended Cross Notice of Motion by the Defendants and the one by the Plaintiff to set aside my orders dated 11th March on 20th March this year. I have reserved until today and due to other work commitments I could not be able to reach the matter as expected.

History of the case

4. In the Originating Summons, the Plaintiff seeks four declarations, one order in the form of direction and an injunction against the three Defendants about the management and administration of the trust property belonging to Lihirians shares in Lihir Gold Mine Limited. The trust property is currently managed by the Second Defendant.

5. The second declaration seeks to declare that the Deed of Settlement on Lihirians Equity Trust settled on 14th August 1997 between the Secretary for Mining and Petroleum and the Second Defendant for the management of the Trust Property on behalf of MRDC and the State should no longer have any binding effect.

6. Thirdly, the plaintiff says that, the Third Defendant at no time before 1st September 2008 ever been duly appointed by the shareholders meaning the Lihirians to be the nominee trustee shareholder of the Second Defendant which now unlawfully holds itself out as trustee shareholder of the Second Defendant.

7. The Plaintiff seeks a further declaration to declare that, the First Defendant has failed to call regular Annual General Shareholders’ meetings in breach of the Companies Act 1997 and the Constitution of the Second Defendant.

8. As the result of the fourth declaration they seek, they seek an order to direct the First Defendant to call a special shareholders meeting in compliance with the Second Defendant’s Constitution and the Companies Act.

9. The final order sought is an injunction to prevent the First Defendant from conducting further business on behalf of the Second Defendant in their capacity as directors of Mineral Resource Lihir Limited.

10. In his submission in favour of the Amended Cross Notice of Motion (the Notice), Mr. Kuman of counsel for the three Defendants urged the court to dismiss these proceedings as it does not disclose any reasonable cause of action. Counsel referred to the affidavit evidence filed by eight deponents in support of the Notice.

11. In case of Melchizedek Morus, he is the Company Secretary of the Second Defendant. He says the authority and power to appoint and remove a director is vested in the Second Defendant’s Board of directors. He says the Plaintiff is not a shareholder of the Second Defendant (MRL) and not a beneficiary of the Trust Property managed by MRL. The second argument raised by Mr. Morus on his affidavit filed on 3rd March 2009 (see par.16 & 17) is that of locus standi. He says the Plaintiff has no standing and the claim can not stand without legs.

12. He says the genuine landowners of Lihir do not support the Plaintiff’s action and have expressed concern to the Plaintiff’s President on a letter dated 20th February 2009. (See ‘MM10’).

13. The Nominee Shareholder of MRL is the State. He even says that the Plaintiff is not a legal or equitable shareholder at the time it made the resolution to revoke Mr. Mark Soipang and Mr. Kiapsasieh which according to the deponent was wrong in law and illegal.

14. The court was led through affidavits of six Chiefs who are clan leaders of the six (6) separate major clans on the island of Lihir. They include Chief Philip Pasap representing Lamatlik clan, Chief John Kapsa representing Unawos clan, Chief and clan leader Lucas Chee who represents Nikama clan, Chief and clan leader Patrick Labongis of Tengawom clan, Chief Herman Saet clan leader of Tnetalgo Clan and Chief John Bosco Solias representing Nissal Clan.

15. In case of Lamatlik Clan, Chief Philip Pasap says that he is the clan leader of that clan and his clan operates a landowner company called Lamatlik Investments Limited. He is the Chairman and Managing Director of that company. He says, Lamatlik clan does not support these proceedings and says this action is not in support of the recent development taking place on Lihir Island.

16. He further says that his clan views these proceedings with suspicion as it is supported and encouraged by non-Lihirians who may have ulterior motives to destroy the customary ties that have existed in the past and if not guarded against outside influence will destroy the culture after closure of the mine.

17. For the Unawos Clan, Chief John Kapsa states that his clan is also concern about the current proceedings. His clan runs its own landowner company for the interests of its clan which is called Unawos Investments Limited. He says his clan does not approve of these proceedings and his clan members see that, if judgment is granted to the Plaintiff will destabilized the customary practices after the mine is closed. Chief John Kapsa is the Chairman and Managing Director of Unawos Investments Limited.

18. The Managing Director of Nikama Investments Limited, Chief Lucas Chee says much the same thing as the other two clan leaders say. In his case he is the clan leader of Nikama Clan which is a landowner company. According to him the landowner company operates for the best interest of his clan and his clan does not want to be left in a situation where Lihirians will become poor and destitute after the Lihir mine closes. Chief Lucas also says that, his clan does not believe that, these proceedings will provide any benefits to Lihirians and his clan sees the claim with suspicion such that his clan does not want non-Lihirians to destroy their culture.

19. The remaining three deponents Chief, Clan Leader and Managing Director of Tengawom Investments Limited, Patrick Labongis, Chief Herman Saet, the Chairman and Managing Director of Ailia Limited, the landowner company...