SCA NO. 12 OF 2006; Mineral Resources Development Company Limited and Imbi J Tagune—The Manager Client Services, Mineral Resources Development Company Limited and Mr Francis Kaupa - The Managing Director, Mineral Resources Development Company Limited and Philip Kende v Mathew Sisimolu - Chairman; Pr Sam Yaneka - Deputy Chairman; Kipsy Piele - Secretary and Upeke Kairi - Treasurer, as the Executive of the Wolutou Incorporated Land Group No. 6323 for and on behalf of Themselves and Members of the Wolutou Incorporated Land Group and Wolutou Clan (2010) SC1090;

• Jurisdiction: Papua New Guinea
• Judge: Lenalia, Davani, Kariko JJ
• Judgment Date: 15 December 2010
• Court: Supreme Court
• Citation: (2010) SC1090
• Year: 2010
• Judgement Number: SC1090

Full Title: SCA NO. 12 OF 2006; Mineral Resources Development Company Limited and Imbi J Tagune—The Manager Client Services, Mineral Resources Development Company Limited and Mr Francis Kaupa - The Managing Director, Mineral Resources Development Company Limited and Philip Kende v Mathew Sisimolu - Chairman; Pr Sam Yaneka - Deputy Chairman; Kipsy Piele - Secretary and Upeke Kairi - Treasurer, as the Executive of the Wolutou Incorporated Land Group No. 6323 for and on behalf of Themselves and Members of the Wolutou Incorporated Land Group and Wolutou Clan (2010) SC1090;

Supreme Court: Lenalia, Davani, Kariko JJ

Judgment Delivered: 15 December 2010

SC1090

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 12 OF 2006

BETWEEN:

MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED

First Appellant

AND:

IMBI J. TAGUNE – THE MANAGER CLIENT SERVICES, MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED

Second Appellant

AND:

MR. FRANCIS KAUPA -

THE MANAGING DIRECTOR, MINERAL RESOURCES DEVELOPMENT COMPANY LIMITED

Third Appellant

AND:

PHILIP KENDE

Fourth Appellant

AND:

MATHEW SISIMOLU - CHAIRMAN; PR SAM YANEKA - DEPUTY CHAIRMAN; KIPSY PIELE - SECRETARY AND UPEKE KAIRI - TREASURER, as the Executive of the WOLUTOU INCORPORATED LAND GROUP NO. 6323 FOR AND ON BEHALF OF THEMSELVES AND MEMBERS OF THE WOLUTOU INCORPORATED LAND GROUP AND WOLUTOU CLAN

Respondents

Waigani: Lenalia, Davani, Kariko .JJ

2009: 26th October

2010: 15th December

STATUTORY AUTHORITY – Mineral Resources Development Company Limited (‘MRDC’) is a Corporation, a statutory authority and an entity of the State – a claimant must give s.5 Notice under the Claims by and against the State Act 1996 (‘CBASA’) in a claim against the MRDC – s.5 of the CBASA.

STATE ENTITY – governing legislation – contains provisions demonstrating that the MRDC is accountable to the State – Mineral Resources Development Company Pty Limited (Privatisation) Act 1996, ss.5, 16, 17, 18

INCORPORATED LAND GROUP (‘ILG’) – Locus standi – ILG’s Constitution – provisions on how and when an ILG can sue – Land Groups Incorporation Act – s.13.

Facts:

1. The respondents filed a claim in the National Court claiming that landowner funds held by the MRDC on their behalf, were paid to persons who purportedly represented the Wolutou ILG and that the MRDC should not have done that. The respondents claimed there was fraud involved in that payout.

2. The appellants applied to dismiss the proceedings in the National Court claiming that the respondents had not given notice to the MRDC under s.5 of the Claims By and Against the State Act (‘CBASA’). They also sought dismissal claiming that the respondents did not have the locus standi or capacity to sue as they did not put before the Court good evidence of minutes of the ILG’s meeting and certificate showing named respondents were properly authorized to sue for and on behalf of the ILG, to be done in accordance with s.13 of the Land Groups Incorporation Act.

3. The trial Judge found and held that the MRDC was not an entity of the State so s.5 notice need not have issued. However, the trial Judge did not make any findings on the locus standi issue.

4. The respondents appealed to the Supreme Court after the grant of leave.

Held:

State entity – That the MRDC is an entity of the State because it’s enabling legislation provides throughout, the large role the State plays in its every day functions. Effectively, the MRDC, a statutory authority, through its enabling legislation and its Constitution, demonstrates that it is answerable to the State in all its functions. Therefore, because of these characteristics, the CBASA applies to it, hence the requirement to firstly issue s.5 notice by those suing the MRDC.

Locus Standi – An ILG’s functions and powers are governed by its Constitution. The powers of the ILG must be exercised in the manner specified by its Constitution. Before it can sue, it must have been properly authorized by the ILG to do so, to be done in accordance with the relevant provisions in its Constitution. If the purported members of the ILG do not have that authority, then they do not have standing to sue for and on behalf of that ILG.

Case Cited:

SCR 4 of 1980; the Petitioner M.T Somare [1981] PNGLR 265;

PNG Air Pilots Association v. Director of Civil Aviation and Air Niugini [1983] PNGLR 1;

Olympic Stationery Ltd v. The Independent State of Papua New Guinea (2001) N2194;

Daniel Hewali v. PNG Police Force and the State (2002) N2233;

Okam Sakarius & Ors v. Chris Tep, Projector Manager & Cocoa Coconut Agency (2003) N2355;

Mathew Totori v. Bob Nenta (2003) N2373;

Dan Salmon Kakaraya vs. The Ombudsman Commission & The State (2003) N2478;

Yawasoro Poultry Farm v. The PNG Defence Force and the State (2004) N2736;

Otto Napi v. National Capital District Commission (2004) N2797;

Dumal Dibiaso Incorporation Land Group No. 1664 & Ors v. Kola Kuma & Ors (2005) SC 805;

Naomi Vicky John v. National Housing Corporation (2005) N2770;

Albert Purane v. Ase Tipurupeke Land Group Inc., MRDC & Secretary for Department of Petroleum & Energy (2005) N2806;

Eliakim Laki & Ors v. Guau K Zurenuoc & 2 Others (2005) N2818;

John Napi v. Kundiawa General Hospital Board (2006) N3047;

Bernard Uriap v. Simon Tokivung & Ors (2008) N3444;

National Capital District Commission v. Jim Reima on behalf of himself and 120 Youth Groups of Moresby North East and Balus Sokele and Robame Pesimi (2009) SC 993.

Counsel:

J. Kumura, for the first, second and third appellants

D. Bidar, for the fourth appellant

I. Mileng, for the respondents

DECISION

15th December, 2010

1. BY THE COURT: Mineral Resources Development Company Limited (‘MRDC’), first appellant, appeals from a ruling in the National Court, handed down on 10th January, 2006 in proceedings WS 1086 of 2005, Mathew K. Sisimolu & Ors v. Mineral Resources Development Company Limited & Ors.

2. As this was an appeal from an interlocutory ruling, the appellant applied for leave to appeal which was granted by the late Chief Justice Kapi on 15th June, 2006.

Background

3. In summary, the Notice of Appeal filed on 6th July, 2006 pleads the following grounds of appeal;

(i) That the trial Judge erred when he held that the MRDC was not a governmental body;

(ii) That therefore, the respondents should have given s.5 Notice under the Claims By and Against the State Act 1996 (‘CBASA’);

(iii) That the trial Judge erred when he ruled that the respondents had standing and authority to issue the proceedings in the National Court when it did not have the authority from the Wolutou Incorporated Land Group No. 6323 (‘Wolutou ILG’) to bring the action in the National Court.

4. The respondents oppose the appeal.

Issues

5. The issues before the Court are whether;

(i) The MRDC is a statutory authority/governmental body;

(ii) If so, whether s.5 Notice should have been given by the respondents prior to filing the Court action;

(iii) Whether the respondents as plaintiffs, should have filed the Writ of Summons and Statement of Claim in the National Court as individuals without firstly obtaining authority from the incorporated land group, in breach of relevant provisions in its Constitution.

Analysis of evidence and the law

6. (i). Parties to appeal; Before discussing the issues, we describe the parties to this appeal.

7. The first appellant is an entity created under the Mineral Resources Development Company Limited (Privatization) Act 1996 (‘MRDC Act’). The second and third appellants are officers or employees of the first appellant and are joined in that capacity. The fourth appellant is the Chairman of Petroleum Resources Gobe Limited, a landowner company.

8. The respondents are the executive of the Wolutou Incorporated Land Group No. 6323 that represents the Wolutou Land Group, a land group within the Gobe Project Area.

9. (ii). National Court proceedings; In the National Court proceedings, the respondents sought reimbursement or an order for the return of K94,000.00 from the appellants which they claimed was wrongly paid by the first appellant to the fourth appellant in the belief that K94,000.00 was the respondents’ share or entitlement from their equity interest based on their percentage of ownership in the Gobe Project Area.

10. Pending trial on the substantive matter, the first appellant filed a Notice of Motion in the National Court seeking to dismiss the entire proceedings pursuant to O.12 r.1 of the National Court Rules (‘NCR’) and further, for failure to give notice to the State pursuant to s.5 of the CBASA, which application was opposed by the respondents.

11. In their submissions to dismiss the substantive proceedings for failing to give notice under s.5 of the CBASA, the appellants argued that the MRDC is a State entity and therefore s.5 Notice was a condition precedent and should have been issued prior to the filing and service of the Writ of Summons and Statement of Claim.

12. The appellants also submitted...