Karridale Limited v Kulawood Limited
Dispute over competing logging rights on Woodlark Island
Logging companies mentioned in this document:
Concessions mentioned in this document:
N10465
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
WS NO 288 OF 2013
KARRIDALE LIMITED
Plaintiff
V
KULAWOOD LIMITED
First Defendant
JOHN MOSORO, MANAGING DIRECTOR,
NATIONAL FOREST SERVICE
Second Defendant
NATIONAL FOREST SERVICE
Third Defendant
FAITH BARTON, CHAIRMAN, NATIONAL FOREST BOARD
Fourth Defendant
PAPUA NEW GUINEA FOREST AUTHORITY
Fifth Defendant
Waigani: Cannings J
2023: 1st & 6th September
PRACTICE AND PROCEDURE – motion for summary dismissal of proceedings
on ground of abuse of process – National Court Rules, Order 8 rule 27(1), Order
12, rule 40(1) – whether statement of claim is so embarrassing it is an abuse of
process – whether plaintiff has sufficient standing to warrant continuation of
proceedings – whether proceedings ought to have been commenced as judicial
review proceedings under National Court Rules, Order 16 – whether statement
of claim discloses reasonable cause of action.
INJUNCTIONS – whether interim injunction granted ex parte should continue
– whether relevant facts were not disclosed to the Court prior to granting interim
injunction – whether injunction granted on erroneous legal basis – whether
damages a sufficient remedy.
The plaintiff is a registered forest industry participant which has held since 2013 a
series of 12-month timber authorities granted under the Forestry Act authorising
harvesting of timber and other forest operations in specified parts of a province.
The first defendant is also a registered forest industry participant which in 2018
was granted a forest clearing authority of 20 years duration under the Forestry Act
authorising large scale forest clearing for agricultural purposes in specified parts of
the same province. The plaintiff in 2023 commenced proceedings by writ of
summons against the first defendant and four other defendants; those other four
defendants being so closely connected that they can be regarded as the Papua New
Guinea Forest Authority (PNGFA) defendants. The plaintiff sought declarations
that the forest clearing authority is null and void and that the first defendant has
been conducting forest industry activities unlawfully and orders that income earned
by the first defendant from timber exports be paid to the plaintiff and that the first
defendant cease all its operations relying on the unlawful forest clearing authority
and that its assets be frozen. The plaintiff also claims general and special damages.
The first defendant filed a notice of motion seeking summary dismissal of the
proceedings for being an abuse of process. The first defendant claimed that in the
event its motion for summary dismissal failed, an interim injunction granted ex
parte by the Court should not be continued. The Court heard the motion for
summary dismissal and the application to set aside the interim injunction.
Held:
(1) The statement of claim was confusing and convoluted but not so
embarrassing that it ought to be struck out; and, though defective, was not so
deficient as to fail to disclose a reasonable cause of action.
(2) It is not so clear at this stage of the proceedings that the plaintiff lacks
standing to maintain the proceedings.
(3) The proceedings include a claim for damages for the tort of negligence and
therefore was properly commenced by writ of summons.
(4) It was not proven that the proceedings are an abuse of process to the extent
warranting the exercise of discretion to summarily dismiss the proceedings.
(5) As to the interim injunction, it was the case that material facts were not
disclosed by the plaintiff in applying for the injunction, so it was appropriate
to set aside the injunction and replace it with another injunction which
maintains the status quo and allows both the plaintiff and the first defendant
to continue forest industry operations in accordance with the authorities
granted to them under the Forestry Act.
Cases Cited
The following case is cited in the judgment:
Takori v Yagari (2007) SC905
Counsel
A Kimbu, for the Plaintiff
C Joseph, for the First Defendant
F Pailaea, for the Second to Fifth Defendants
6th September 2023
1. CANNINGS J: The plaintiff, Karridale Ltd, is a registered forest industry
participant which has held since 2013 a series of 12-month timber authorities
granted under the Forestry Act authorising harvesting of timber and other forest
operations in specified parts of Woodlark Island, Milne Bay Province.
2. The first defendant, Kulawood Ltd, is also a registered forest industry
participant which in 2018 was granted a forest clearing authority of 20 years
duration under the Forestry Act authorising large scale forest clearing for
agricultural purposes in specified parts of Woodlark Island, Milne Bay Province.
3. The plaintiff on 12 July 2023 commenced proceedings by writ of summons
against the first defendant and four other defendants; those other four defendants
being so closely connected that they can be regarded as “the Papua New Guinea
Forest Authority (PNGFA) defendants”. The main grievances agitated in the
statement of claim are that the PNGFA negligently and unlawfully granted the first
defendant’s forest clearing authority and allowed the first defendant to trespass into
areas of land in which the plaintiff has lawfully harvested timber and established
bases and infrastructure for its forest operations.
4. The plaintiff appears to plead a cause of action in the tort of negligence
against the PNGFA defendants. It seeks the following relief:
• declarations that the forest clearing authority granted to the first
defendant is null and void and that the first defendant has been
conducting forest industry activities unlawfully;
• orders that income earned by the first defendant from timber
exports be paid to the plaintiff and that the first defendant
cease all its operations relying on the unlawful forest clearing
authority;
• orders that the first defendant’s assets be frozen; and
• general and special damages, apparently against all defendants.
5. The first defendant on 28 July 2023 filed a notice of motion seeking summary
dismissal of the proceedings under Order 8 rule 27(1) and Order 12 rule 40(1) of
the
National Court Rules for being an abuse of process in that:
• the statement of claim contains so many vague and unsupported
allegations of a confusing and convoluted nature, it is
embarrassing and ought to be struck out;
• the plaintiff lacks standing to maintain the proceedings; and
• the proceedings ought to have been commenced by judicial
review under Order 16 of the National Court Rules.
6. In the event its motion for summary dismissal fails, the first defendant seeks
an order that the interim injunction granted ex parte by the Court on 13 July 2023
should not be continued.
7. This is my ruling on the first defendant’s motion for summary dismissal and
its oral application to set aside the interim injunction.
SHOULD THE PROCEEDINGS BE DISMISSED AS AN ABUSE OF
PROCESS?
8. I agree that the statement of claim is confusing and convoluted in large parts
and that it contains a lot of opinion and is drafted in emotive terms and contains
too much evidence without clearly pleading facts on which the causes of action and the prayer for relief are based. 9. However, I have seen much worse and more loosely drafted statements of claim that have survived and been able to provide a proper platform for trial. I consider this statement of claim is not so embarrassing that it ought to be struck out; and, though it is defective, it is not so deficient as to fail to disclose a reasonable cause of action. 10. I appreciate the first defendant’s argument that the plaintiff’s claim is misconceived and that the plaintiff presently has an interest in a relatively small area of land and that its interests are not affected by the first defendant’s forestry operations and therefore it lacks a sufficient interest in the legality of the first defendant’s forest clearance authority. 11. However, I consider that it is not so clear at this stage of the proceedings that the plaintiff lacks standing to maintain the proceedings. 12. Because so much of the statement of claim is focussed on the legality of the first defendant’s forest clearing authority and the decisions of the PNGFA defendants to grant that authority, it was open to the plaintiff to commence the proceedings by judicial review. However, the proceedings include a claim for damages for the tort of negligence and are therefore properly commenced by writ of summons in accordance with Order 4 rule 2(1)(a) of the National Court Rules. 13. The discretion to summarily dismiss proceedings must be exercised sparingly and with an abundance of caution (Takori v Yagari (2007) SC905). 14. I am not satisfied that the proceedings are an abuse of process to the extent warranting the exercise of discretion to summarily dismiss the proceedings. I refuse to dismiss the proceedings. INJUNCTION 15. I am satisfied that some material facts were not disclosed to the Court by the plaintiff in applying for the interim injunction (in particular, the effect of the first defendant’s forest operations on the plaintiff’s forest operations). It is appropriate to set aside the injunction and replace it with another injunction which maintains the status quo and allows both the plaintiff and the first defendant to continue their forest industry operations in accordance with the authorities granted to them under the Forestry Act.
CONCLUSION
16. The motion for dismissal of the proceedings will be refused. The application
to set aside the interim injunction is granted, subject to another injunction in more
limited terms being granted. None of the parties have entirely succeeded so they
will bear their own costs.
ORDER
(1) The first defendant’s application by notice of motion filed 28 July 2023 for
dismissal of the proceedings is refused.
(2) The first defendant’s oral application, made at the inter partes hearing on 1
September 2023, to set aside the order of 13 July 2023 is granted in that the
order of 13 July 2023 is set aside and replaced by the following, made on the
own motion of the Court pursuant to s 155(4) of the Constitution:
The first defendant is restrained from undertaking any forest industry
activities pursuant to its forest clearing authority No 4-01 or any other
authority, licence or permit issued to it under the Forestry Act or in any way
to the extent that such forest industry activities are undertaken on, or have
the effect of interfering with the plaintiff’s enjoyment of, the area of land
covered by timber authority 04-105 issued to the plaintiff on 29 May 2023.
(3) This proceeding will return for mention on 13 September 2023 at 1.30 pm,
which shall be the return date for any notice of motion filed by any of the
parties on or before 13 September 2023.
(4) The parties will bear their own costs of and incidental to the hearing of 1
September 2023
__________________________________________________________________
Kimbu & Associates Lawyers: Lawyers for the Plaintiff
Ashurst Lawyers: Lawyers for the First Defendant
Chillions Lawyers: Lawyers for the Second to Fifth Defendants
