PNG Power Limited v Bob Kerenga as Chairman of the Kapma Gaten Landowners Association of Kau Basis and Dumun Villages, Simbu Province (2020) N8264

• Jurisdiction: Papua New Guinea
• Judge: David, J
• Judgment Date: 23 March 2020
• Court: National Court
• Citation: (2020) N8264
• Docket Number: OS NO.166 OF 2016
• Year: 2020
• Judgement Number: N8264

Full Title: OS NO.166 OF 2016; PNG Power Limited v Bob Kerenga as Chairman of the Kapma Gaten Landowners Association of Kau Basis and Dumun Villages, Simbu Province (2020) N8264

National Court: David, J

Judgment Delivered: 23 March 2020

N8264

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO.166 OF 2016

BETWEEN:

PNG POWER LIMITED

Plaintiff/Cross-Defendant

AND:

BOB KERENGA as Chairman of the Kapma Gaten Landowners Association of Kau Basis and Dumun villages, Simbu Province

Defendant/Cross-Claimant

Waigani: David, J

2020: 23rd March

LIMITATION OF ACTIONS – claim for compensation under transmission line access agreement – claim founded on simple contract –time for payment of compensation not stipulated - whether action time-barred – Frauds and Limitations Act, Section 16(1)(a).

Cases Cited:

Papua New Guinea Cases

Brian Josiah v Steven Raphael (2018) SC1665

Joe Kerowa v MVIL (2010) SC1100

John Hiwi v Rendle Rimua (2015) SC1460

Michael Nunulrea v PNG Harbours Ltd (2005) N2790

Otto Benal Magiten v Kopina Raka (2002) N2179

Oil Search Ltd v Mineral Resources Development Corporation Ltd (2010) SC1022

Paul Kumba v Motor Vehicles Insurance (PNG) Trust (2001) N2132

Overseas Cases

Midland Bank v Hett, Stubbs & Kemp [1978] 3 All ER 571

Wylie v Wake [2000] EWCA Civ 349

Treatise Cited:

Chitty on Contracts, Volume 1, General Principles, 1994, Sweet & Maxwell

Halsbury’s Laws of England, Volume 28, 4th Edition

Counsel:

Derrick Dusava, for the Plaintiff/Cross-Defendant

Edward Keka Komia, for the Defendant/Cross-Claimant

JUDGMENT

23rd March, 2020

1. DAVID, J: INTRODUCTION: The plaintiff/cross-defendant, PNG Power Limited (PNG Power) instituted these proceedings seeking a number of declarations and permanent restraining orders against the defendant/cross-claimant, Bob Kerenga as Chairman of the Kapma Gaten Landowners Association of Kau Basis and Dumun villages, Simbu Province (Kerenga). During the course of the proceedings, the Court ordered the proceedings to continue on pleadings and granted leave to Bob Kerenga to file a cross claim and he did. A trial was conducted on both PNG Power’s claim and Kerenga’s cross-claim which were both contested. This is the decision of the Court on both claims.

PLAINTIFF/CROSS-DEFENDANT’S CLAIM

2. In PNG Power’s originating summons filed on 30 March 2016 which was later amended by amended originating summons filed on 13 April 2016 (amended originating summons), the main relief sought are:

1. A declaration that the land compensation claim by the defendants is time-barred and therefore unenforceable by a court of law pursuant to Section 16 of the Frauds and Limitations Act.

2. A declaration that there being no Court Order ordering the payment of compensation to the defendants by the plaintiff, the plaintiff is under no legal obligation to pay any compensation to the defendants.

3. A declaration that the supply of electricity throughout Papua New Guinea is an essential service and cannot be disrupted due to unjustifiable claims for compensation.

4. A declaration that threatening to disrupt the supply of electricity by vandalizing the property of PNG Power Limited and demanding compensation is a criminal act pursuant to Section 309 of the Criminal Code.

5. A declaration that the plaintiff, its servants, agents and contractors should be permitted to enter upon land to carry out works pursuant to Section 26 of the Electricity Industry Act.

6. An order restraining the defendants and their agents, associates, servants or kinsmen from causing any intimidation, harassment and threatening of any employees of the plaintiff, PNG Power Limited and its associates, agents or contractors from carrying out their lawful duties.

7. An order that the defendants and their agents, servants, associates or kinsmen be restrained from causing any damage, destruction or vandalism to any properties including power poles, lines, towers and any plant or equipment along the Dumun area of the Highlands Highway.

8. An order that in the event that the defendants and their servants, agents, associates or kinsmen fail to comply with orders 5 and 6, the principal defendant Bob Kerenga shall be in contempt of Court and can be arrested by the Police force for the said offence.

DEFENDANT/CROSS-CLAIMANT’S CROSS-CLAIM

3. Kerenga is an adult citizen of Papua New Guinea and is from Kapma Gaten tribe of Sinasina District in the Simbu Province. He represents himself and 3,600 others from his tribe in pursuing their claim against the plaintiff.

4. PNG Power is an entity established under the Independent Public Business Act 2002. It can sue and be sued and can be vicariously liable for the actions and omissions of its employees.

5. In or about April 1988, PNG Power’s predecessor, PNG Electricity Commission (ELCOM), entered into an open Transmission Access Agreement with leaders of the defendant’s tribe (the TAA). The TAA allowed PNG Power, its agents and servants to enter the defendant’s virgin land/forest at Nilkama Valley which is situated between Chuave and Kundiawa in the Sinasina District (the land) to cut and clear out an easement or corridor of land containing pristine, thick and vast natural rain forest (forest) measuring 12 kms in length and 20 metres wide (the corridor) to pave way for PNG Power to erect power pylons/lines on their land.

6. The forest was the source of food and water supply, habitat for birds and animals used for food and traditional costumes, timber for various use including firewood and building and fencing materials, home of sacred sites and spirits.

7. ELCOM grossly deceived the Kerenga’s tribe into believing that when the project was completed they would; restore the forest back to its original condition as nearly as possible and practicable; be paid compensation for destruction caused to their forest and properties along the corridor; compensate them for injuries and damage caused to third parties; and indemnify the tribe from any claim by third parties. It was on those basis that Kerenga’s tribe agreed to sign the TAA.

8. Upon signing the TAA, PNG Power, its servants, agents or employees entered the land and cut and cleared forest along the corridor.

9. For reasons unknown to Kerenga’s tribe, PNG Power neither completed the project nor restored the forest as nearly as possible to its original condition nor compensate Kerenga’s tribe contrary to and in breach of the TAA. Kerenga’s tribe has suffered loss and damage as a result.

10. In 2003, Kerenga started making enquiries about the project and on 3 March 2006 wrote a letter to PNG Power’s manager at Kundiawa to which no response was received. A claim in the sum of K10 million was made to PNG Power. In September and November 2006 and February 2007, PNG Power, through its Manager, Legal Services communicated with Kerenga on the claim and engaged officers to conduct an investigation which involved visits to the project site, meetings with representatives of landowners, and taking photographs.

11. Environmental experts were engaged and resulted in a report by one Ted Mamuy dated 18 March 2006. The report reported that; significant flora was destroyed within 24 ha of the forest; commercially loggable trees and others were destroyed; fauna and ceremonial areas were destroyed; landslides occurred as a direct result of the clearance of the forest; important tree species called Yomba was lost or destroyed; and loss of biomass. Another report by one Bafike Kongrui of Chem Clean Environmental Services Ltd in September 2010 reported that environmental damage caused was assessed at K5,065,625.33.

12. The statute of limitation does not apply as the damage suffered by Kerenga’s tribe was continuous and unlimited.

13. On 24 September 2010, Kerenga formally declared that there was a breach of the TAA and pursued the claim of K10 million against PNG Power.

14. Kerenga claims a number of declarations including that the TAA signed on 25 March 1988 was legally binding on the parties to it; compensation in the sum of K5,065,225.00; special damages in the sum of K5,065,625.33, general damages for distress, hardship and expense incurred in executing the TAA; interest; and parties to meet their own costs of the proceedings.

PLAINTIFF’S DEFENCE TO CROSS-CLAIM

15. PNG Power denies liability. It avers that; PNG Power is a company established under the Companies Act whose shares are held by the Independent Public Business Corporation; over 28 years have lapsed since the TAA was signed and the claim is statute barred by virtue of Section 16 of the Frauds and Limitations Act; the original persons who signed the TAAs were paid compensation for clearing the corridor at the material time; the project was abandoned due to the difficult terrain; over the course of time, the forest along the corridor has naturally regrown to its original state and this fact has been reported in environmental reports; the reports that Kerenga relies on were done some 20 years after the fact and therefore are not the true description of the value of plants within the corridor that was cleared.

REPLY TO PLAINTIFF’S DEFENCE TO CROSS-CLAIM

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