Tzen Pacific Ltd v Kanawi Pouru

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 25 April 2013
• Citation: (2013) N5156
• Court: National Court
• Year: 2013
• Judgement Number: N5156

Full : OS (JR) NO 715 of 2010; Tzen Pacific Limited v Kanawi Pouru, Managing Director, Papua New Guinea Forest Authority and National Forest Service, Member of the National Forest Board and Joseph Lelang, Thomas Paka, Moses Gawi, Josephine Gena, Bonny Ninai, Dr Wari Iamo, Bob Tate & Anda Akivi, Members of the National Forest Board and The Independent State of Papua New Guinea Innovest Limited and Aria Vanu Timber Company Limited (2013) N5156

National Court: Cannings J

Judgment Delivered: 25 April 2013

N5156

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS (JR) NO 715 OF 2010

TZEN PACIFIC LIMITED

Plaintiff

V

KANAWI POURU, MANAGING DIRECTOR, PAPUA NEW GUINEA FOREST AUTHORITY AND NATIONAL FOREST SERVICE, MEMBER OF THE NATIONAL FOREST BOARD

First Defendant

JOSEPH LELANG, THOMAS PAKA, MOSES GAWI, JOSEPHINE GENA, BONNY NINAI, DR WARI IAMO, BOB TATE & ANDA AKIVI, MEMBERS OF THE NATIONAL FOREST BOARD

Second Defendants

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

Third Defendant

INNOVEST LIMITED

Fourth Defendant

ARIA VANU TIMBER COMPANY LIMITED

Fifth Defendant

Waigani: Cannings J

2013: 20, 21, 22, 27 March, 25 April

JUDICIAL REVIEW – application for review of decision to grant licence to engage in forest industry activities – Forestry Act 1991, Section 91 (issue of a licence) – whether decision to grant licence contrary to Section 91 or unreasonable or made in breach of principles of natural justice or contrary to Forestry Act, Section 97 (conviction of the holder of a licence etc) or contrary to court order.

JUDICIAL REVIEW – remedies – whether court constrained by orders sought in notice of motion – whether acceptable to apply for relief by statement under National Court Rules, Order 16, Rule 3(2)(a).

The National Forest Board, the second defendant, granted a 12-month licence under Section 91 of the Forestry Act to a timber company, the fourth defendant, to engage in forest industry activities in a particular project area. The plaintiff, a competing timber company, was aggrieved by the Board’s decision, its main grievance being that eight months earlier the Board had granted it a licence in similar terms to engage in forest industry activities in the same project area. The Minister for Forests had cancelled the plaintiff’s licence before granting the licence to the fourth defendant but the plaintiff claimed that cancellation of its licence was unlawful. The plaintiff sought judicial review of the Board’s decision to grant the licence to the fourth defendant and relief including orders quashing the fourth defendant’s licence and confirming the legality of the plaintiff’s licence and damages, on five grounds, that the decision was: (1) contrary to Section 91 of the Forestry Act; (2) unreasonable and an abuse of power; (3) contrary to the principles of natural justice as the plaintiff was not informed that its licence would be cancelled; (4) contrary to the Forestry Act as the plaintiff’s licence had not been cancelled in accordance with Section 97 of the Forestry Act; and (5) contrary to an order of the National Court.

Held:

(1) The first ground of review was based on two false premises: that the plaintiff’s licence had not been cancelled and that Section 91 prevents the Board granting two licences over the same project area. In fact the plaintiff’s licence was cancelled, and Section 91 does not prohibit two or more licences being granted over the same project area. The first ground of review was dismissed.

(2) The decision was not so unreasonable or absurd that no reasonable decision-maker in the position of the Board could have made it. Nor was there evidence that the decision was made in bad faith or for an improper purpose such that it could be regarded as an abuse of power. The second ground of review was dismissed.

(3) The plaintiff, being the holder of a statutory licence, was entitled to be heard on the question whether its licence ought to be cancelled. This was an underlying law right that would be readily implied in the absence of statutory provisions expressly conferring such a right. There are express provisions in the Forestry Act. A Section 91 licence may only be cancelled in accordance with the procedure in Section 97: the Managing Director shall serve a notice on the licence holder advising of the intention to cancel and the reason for the intended cancellation and requiring the licence holder within 14 days to make representations. Here, no such notice was served on the plaintiff so cancellation of its licence involved a denial of natural justice. It followed that it should have been given a right to be heard on the proposal to grant a new licence to the fourth defendant. No such right was given so it was again denied natural justice. The third ground of review was upheld.

(4) The fourth ground of review was repetitious and unnecessary and was dismissed.

(5) The Board’s decision was not made in breach of the court order referred to in ground 5, which on its terms did not prevent and was not intended to prevent the Board from discharging its statutory powers, functions, duties and responsibilities. The fifth ground of review was dismissed.

(6) As one ground of review was upheld the Board’s decision was susceptible to judicial review and the court had a discretion to exercise as to the appropriate relief. The court declined all substantive relief including the award of damages sought by the plaintiff some of which had not been properly sought by notice of motion and the granting of all of which would be contrary to the interests of justice as the court was satisfied that though mistakes were made in the decision to cancel the plaintiff’s licence and the decision to grant the fourth defendant’s licence, each licence was only of 12 months duration and the decisions to cancel the plaintiff’s licence and to grant the fourth defendant’s licence were made in good faith and for good reason as there was evidence that the plaintiff had breached the conditions of the licence and the circumstances in which the plaintiff had taken an assignment of rights and obligations under the logging and marketing agreement to which the licences were connected was questionable and the holder of the timber permit (the fifth defendant) to which both licences were connected had lost confidence in the plaintiff and wanted the fourth defendant to be granted a licence.

(7) The application for judicial review was accordingly dismissed and the parties were ordered to bear their own costs.

Cases cited

The following cases are cited in the judgment:

Bougainville Copper Foundation v Minister for Trade and Industry [1988-89] PNGLR 110

Central Pomio Logging Corporation Pty Ltd v The State [1992] PNGLR 20

Dale Christopher Smith v Minister for Lands (2009) SC973

Mision Asiki v Manasupe Zurenuoc (2005) SC797

Paias Wingti v Kala Rawali (2010) N3982

Paul Dopsie v Jerry Tetaga (2009) N3720

Paul Saboko v Commissioner of Police (2006) N2975

Peter Makeng v Timbers (PNG) Ltd (2008) N3317

Ralph Premdas v The State [1979] PNGLR 329

Tau Kamuta v David Sode (2006) N3067

Telepage Pty Ltd v PTC (1987) N605

Timbani Longai v Steven Maken (2008) N4021

Tzen Pacific Ltd v Peter Puana and Aria Vanu Timber Company Ltd SCA 17 of 2011, 02.03.12 unreported

Counsel

F A Griffin, for the plaintiff

I R Shepherd,for the first and second defendants

E S Geita, for the third defendant

A Waviha, for the fourth defendant

G Kaore, for the fifth defendant

25th April, 2013

1. CANNINGS J: This is a ruling on an application for judicial review. The plaintiff Tzen Pacific Ltd applies for judicial review of the decision of the National Forest Board to grant a 12-month licence under Section 91 of the Forestry Act to a rival timber company, Innovest Ltd, to engage in forest industry activities in the timber project area known as Aria Vanu Block 3 in the Arowe area on the south coast of West New Britain.

2. The plaintiff is aggrieved by the Board’s decision as eight months earlier the Board had granted it a licence in similar terms to engage in forest industry activities in the same project area. The plaintiff is a licensed forest industry participant and says that it and its related companies, Cakara Alam (PNG) Ltd and Tzen Niugini Ltd, had been conducting forest industry activities including harvesting and marketing of forest produce lawfully and responsibly in the project area since 2003 in accordance with a series of licences granted by the Board under the Forestry Act and pursuant to a logging and marketing agreement with a local landowner company, Aria Vanu Timber Company Ltd, which is the holder of the timber permit authorising forest industry activities in the project area. The plaintiff says that the original logging and marketing agreement between Aria Vanu Timber Company and Cakara Alam was of five years duration. It ran from 2003 to 2008 and was extended in 2008 and will expire in November 2013. It says that Cakara Alam’s rights and obligations under the logging and marketing agreement were...