Mount Kare Holdings Pty Ltd and Dibusa Mining Pty Ltd v Wapela Akipe [Wapula Akipa], Simon Kambe, Anton Pakema, The Honourable Patterson Lowa, Minister for Minerals and Energy, Israel Israel, Mining Registrar of the Department of Minerals and Energy and The Independent State of Papua New Guinea [1992] PNGLR 60

• Jurisdiction: Papua New Guinea
• Court: Supreme Court
• Citation: [1992] PNGLR 60
• Date: 26 February 1992
• Year: 1992

Full Title: Mount Kare Holdings Pty Ltd and Dibusa Mining Pty Ltd v Wapela Akipe [Wapula Akipa], Simon Kambe, Anton Pakema, The Honourable Patterson Lowa, Minister for Minerals and Energy, Israel Israel, Mining Registrar of the Department of Minerals and Energy and The Independent State of Papua New Guinea [1992] PNGLR 60

Supreme Court: Kapi DCJ, Woods J, Hinchliffe J, Konilio J, Andrew J

Judgment Delivered: 26 February 1992

1 Constitutional Law—Interpretation—Reception of common law—Meaning of "revision" of common law by statute in England—Revision by statute ignored—Constitution Sch2.2(3).

2 Constitutional Law—Interpretation—Applicability inappropriateness of common law to the circumstances of Papua New Guinea—Constitution Sch2.2(1)(b).

3 Maintenance and Champerty—Definition and essentials of—Reception of common law.

4 Reception—Common law—Maintenance and champerty—"Circumstantial applicability".

5 Statute—Criminal Law Act 1967 (UK) s13, s14.

6 Underlying law—Maintenance and champerty—Common law principles.

7 Constitutional Reference No 1 of 1977; Poisi Tatut v Chris Cassimus [1978] PNGLR 295, Iambakey Okuk v Fallscheer [1980] PNGLR 274, The Ship "Federal Huron" v Ok Tedi Mining Ltd [1986] PNGLR 5, Waghi Savings and Loans Society Ltd v Bank of South Pacific Ltd (1980) SC185, Alabaster v Harness [1895] 1 QB 339, Bradlaugh v Newdegate (1883) 11 QBD 1, British Cash and Parcel Conveyors Ltd v Lamson Store Services Co Ltd [1908] 1 KB 1006, De Houghton v Mosey (1866) LR 2 Cr App 164, Hill v Archbold [1967] 3 All ER 110, Hodges v State of New South Wales (1988) 77 ALR 1, In re Trepca Mines Ltd (No 2) [1963] Ch 199, Marriage of Sheehan (1990) 97 FLR 190, Martell v Consett Iron Co Ltd [1955] 1 All ER 481, Nyali Ltd v Attorney–General of Kenya [1956] 1 QB 1, Orme v Associated Newspapers Group Ltd (1980) Times, 3 February, [1980] CA Transcript 809, Prosser v Edmonds (1835) 1 Y & C Ex 481, Singh v Observer Ltd [1989] 3 All ER 777, Trendtex Trading Corp v Credit Suisse [1980] 3 All ER 721, Trendtex Trading Corp v Credit Suisse [1982] AC 679; [1981] 3 All ER 520 and Wild v Simpson [1919] 2 KB 544 referred to

Facts

In October 1990 the Minister for Lands granted to one of the appellants a Special Mining Lease (SML) under the Mining Act over an area of land known as Mt Kare. The first, second and third respondents, who were plaintiffs in the National Court, sought to overturn the grant of the SML. The appellants filed a motion to dismiss the action on the ground that it was the result of an arrangement between the respondents and two local companies backed by an Australian company whereby the Australian company agreed to pay all the legal fees of the respondents in consideration of what was tantamount to an assignment of the rights to litigation from the respondents, along with a share in any mining tenements they may receive as a result of the litigation. The appellants sought to have discovery of the documents which set out the terms of the alleged champertous arrangement. Prior to the hearing of the motion for discovery, the respondents successfully brought a cross motion to have the summons set aside.

The trial judge set aside the summons on the ground that there was no law against maintenance and champerty in Papua New Guinea. He held that these tortious offences were abolished in England by the Criminal Law Act 1967 and, therefore, the law was not adopted in Papua New Guinea at Independence. He further held that, where the common law was abrogated by English legislation before the reception date, there was no common law to receive. He added that if he were in error in holding that the doctrines were not part of English common law and equity immediately prior to Independence and, thus, not adopted, those torts were inappropriate for application to the circumstances of the country.

Issues

1. Whether the reception of the common law on any particular matter included its statutory revision in England by a pre–Independence English legislation which was not adopted under Sch2.6(1)(c) of the Constitution.

2. Whether the torts of maintenance and champerty are appropriate for local application in the circumstances of Papua New Guinea.

Held

1. The English Criminal Law Act 1967 s13 and s14 revised the principles of common law on maintenance and champerty, but as the Act is not adopted by Sch2.6 of the Constitution, the provisions of the Act are to be ignored.

2. The principles of common law relating to maintenance and champerty are applicable to the circumstances of Papua New Guinea and form a part of the underlying law.

3. Obiter: per Kapi DCJ: "revision" of common law includes modification and/or abolition of the principles of common law.

Per Andrew J: "I think that ultimately it is not necessary to decide this point [about abolition] because in my view the principles and rules of the doctrine of maintenance and champerty were only 'revised' or 'modified' [and not abolished] by the Criminal Law Act 1967 in the United Kingdom . . . Clearly the rules prohibiting champerty and maintenance were part of the English rules and principles of common law and equity as at 16 September 1975."

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Kapi DCJ:

In October 1990, the Minister for Lands granted a special mining lease to Mount Kare Holdings Pty Ltd (one of the appellants in this appeal) under the Mining Act (Ch195).

The grant of this lease was disputed and a writ of summons was filed in the National Court by the three representatives of the landowners of Mount Kare (first, second and third respondents). In essence, this cause of action is brought on two grounds. The first is that the relevant provision of the Mining Act (Ch195) upon which the special mining lease was granted is unconstitutional as being an unjust deprivation of an automatic citizen's property. Secondly, if the Mining Act (Ch195) is constitutional, the grant of the special mining lease was not given in accordance with the Mining Act (Ch195).

By a notice of motion filed on 27 September 1991, the first and second appellants sought to dismiss the cause of action instituted by the first, second and third respondents. This motion was based on a doctrine of common law known as the rule against maintenance and champerty. Halsbury's Laws of England, (4th ed, Vol 9, para 400) defines the doctrine as:

"The giving of assistance as encouragement to one of the parties to litigation by a person who has neither an interest in litigation nor any other motive recognized by the law as justifying his interference.

Champerty is a particular kind of maintenance, namely maintenance of an action in consideration of a promise to give the maintainer a share in the proceeds or subject matter of action."

The appellants alleged that first, second and third respondents entered into arrangements with Oakland Pty Ltd, a company incorporated in Papua New Guinea, to provide them with funds of up to A$200,000 in order to cover the cost of litigation against the appellants. In return for this, Oakland Pty Ltd would benefit from any success in the litigation. In particular, Amadio Pty Ltd, a landowners corporation, would apply for a gold mining lease and, if successful, would retain Oakland Pty Ltd to manage, explore, develop and mine the relevant mining tenement on behalf of Amadio Pty Ltd.

In preparation for the hearing of the motion filed by the first and second appellants, the appellants issued summonses to produce and to give evidence against first, second and third respondents, the lawyers Warner Shand, Amadio Pty Ltd and Oakland Pty Ltd.

By two identical motions dated 4 October 1991, first, second and third respondents sought to set aside the summons to produce and to give evidence which were served on first, second and third respondents, Warner Shand, Amadio Pty Ltd and Oakland Pty Ltd. It was these last two mentioned motions which came on for hearing before Amet J on 7 October 1991.

The application by first, second and third respondents to set aside the summonses to produce and give evidence was based on the proposition that the common law...