DC500

PAPUA NEW GUINEA
[IN THE DISTRICT COURT OF JUSTICE]

CASE NO 184 OF 2005

BETWEEN

Sivakumaran Sathasivam
Complainant

V

Benny Popoitai
First Defendant

Elison Pidik
Second Defendant

Tom Milamala
Third Defendant

David Kelso & Others
Fourth Defendants

Port Moresby: Bidar, Pm
2005: 20th July & 1st August

Cases Cited
PNG Forest Products -v- The State [1992] PNGLR 85.
Republic of Peru -v- Peruvian Guamo Company [1887] 36 Ch. D. 489.
Hubbuck and Sons Ltd -v- Wilkinson, Heywood & Clerk Ltd [1889] 1Q.B.86.
Ronny Wabia -v- B.P Exploration Co. Ltd (1998) N1697.
Jack Patterson -v- NCDC (2001) N2145.
Employers Federation of PNG -v- PNG Waterside Workers Union and Others (1982) N392.
AGK Pacific (NG) Ltd -v- William Brand Anderson (2000) N2062.
Gobu Hongu -v- The National Executive Council and Others (1999) N1920.
Robinson -v- National Airline Commission [1983] PNGLR 476.

RULING

1st August 2005.

BIDAR PM: The defendants by Notice of Motion filed on 5th May 2005 seek the following Orders:

"1. Pursuant to s.22 of the District Court Act.

(a) The interim orders made by this Honourable Court on the 1st April 2005 be set aside.

(b) These proceedings be dismissed for being frivolous and vexatious.

2. The complainant pay the defendants costs of and incidental to these proceedings.

3. Such further or other Orders as this Honourable Court deems fit.

4. The time of entry of this order be abridged to the time of settlement by the magistrate which shall take place forthwith.

On the 20th July 2005, complainant filed a cross notice of motion seeking the following Orders:

"1. The requirements for service be dispensed with.

2. The Fourth Defendant, David Kelso be removed as a party and leave be granted for Simon Fraser to be joined as the Fourth Defendant.

3. Time be abridged to the time of settlement which shall take place forthwith.

4. Such further or other Orders or directions as this Honourable Court deems meet.

With respect to these motions Court is of the view that, it is appropriate to deal with the Defendants motion first, so that, if the court rules in favour of the motion, then no purpose will be served with the complainant’s motion.

On the 17th March 2005, the defendants, their lawyer and others attended at the offices of Workers Mutual Insurance (PNG) Limited (WMI). The reason for their visit was to inform the complainant that the Bank of Papua New Guinea, by virtue of its powers under the Life Insurance Act 2000 appointed the Fourth Defendant (David Kelso) as the Statutory Manager for WMI.

At WMI offices, the First Defendant addressed the Complainant and referred to numerous visits by Bank of Papua New Guinea officers to WMI and the investigation by Deloittes which was the reason for their visit. During the discussion, the First Defendant advised the Complainant that the Bank of Papua New Guinea’s decision and its conclusions that the policy holders interests were at risk and continuation of Complainant and the Board was going to result in these risks being realized. The Bank made the decision to suspend the Complainant and the board and appointed the Fourth Defendant as the Statutory Manager.

The First Defendant then handed the Complainant the notice of Fourth Defendant’s appointment as Statutory Manager as well as the notice suspending the Board and asked Complainant to hand over the keys and other assets to the Fourth Defendant. Present at the offices of WMI were also Bank of Papua New Guinea security personnel and two plain clothes policemen.

As a consequence of these events at WMI offices and others the Complainant filed proceedings in this Court, sought and obtained restraining orders on the 1st April 2005. The granting of these restraining or injunctive orders against the Defendants, their servants or agents, is the subject of these proceedings.

The motion by Defendants is supported by affidavit of David Kelso and Michael Badui sworn on 9th May and filed on 10th May 2005 and 10th May and 11th May 2005 respectively.

For Complainant he filed two affidavits. The first affidavit was the one he relied on to obtain the restraining orders. In his first affidavit he portrayed the picture that the Defendants encountered the Complainant with their supporters and threatened, intimidated and abused him. In his affidavit sworn on 12th April 2005 he deposed that Police officers went to his residence on Sunday 10th April at about 11:00am to impound the vehicles he had in his driveway without a Search Warrant. He showed them the restraining orders issued by this Court and they responded that these orders did not apply to them. Consequently he allowed them in. This version of the events is refuted by Michael Badui in his affidavit.

From these circumstances the following are the main issues for determination by this Court:

1. Whether the Court should dismiss these proceedings for being frivolous and vexatious and for disclosing no reasonable cause of action.

2. Whether or not complainant satisfied the principles for obtaining restraining orders or interim injunctions before this Court on 1st April 2005.

The law is clear under sections 21, 22 and 25 of the District Court Act. The restraining orders obtained by Complainant were obtained ex parte and s. 25 provides for setting aside of such orders.

With respect to the first issue, the leading judgement is the case of PNG Forest Products -v- The State [1992] PNGLR 85.

The head note to His Honour Sheehan J’s judgement reads:

"a party has a right to have his case heard, as guaranteed by Constitution and the laws of this country. Such right cannot be lightly set aside. Hence, the National Court rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the Court. For the same reason and in the interest of justice the rule include prohibition against abuse of the Court process. Apart from powers given by the National Court Rules Order 12 Rule 40 to strike out or stay any proceeding which:-

(a) do not disclose a reasonable cause of action; or
(b) are frivolous or vexatious or
(c) are an abuse of Court process,

The Court has powers to protect itself from abuse of its process.

As to what is a reasonable cause of action, there is a string of case law determining that issue. See cases such as Republic of Peru -v- Peruvian Guano Company (1887) 36 Ch 489, Hubbuck and Sons Ltd -v- Wilkinson, Heywood & Clerk Ltd (1889) 1QB 86, where Lord Lindley MR. said:

"An action should only be struck out in cases where" cause of action is obviously and almost incontestably bad."

In this jurisdiction see cases of Ronny Wabia -v- BP Explriation Co. Ltd, Dept. of Mining and Petroleum and The State, N1697 per Sevua J and Jack Patterson -v- NCD (2001) N2145 Kandakasi J. The cases make it clear that the Court’s powers to stay or dismiss an action for failure to disclose an action is not unfettered and must be exercised only in clearest of cases.

On the facts it is clear that the Complainant sought restraining orders merely to prevent the Defendants from threatening him, contacting him, or entering his house or damaging his property, and if these are not adhered to Police to arrest those who breach the restraining orders. What is the substantive cause of action on foot? What is the proprietary interests for which damages or other relief is sought? I find none at all in the proceedings.

As to the second issue, all I wish to say is to refer to the principles in the case of Employers Federation of PNG -v- PNG Waterside Workers Union and Others (1982) N392, where His Honour Kapi DCJ (as he then was) relied on the leading English case of American Cyanide Company -v- Ethicon Ltd (1975) 1 ALLER 504. His Honour summarized the principles as follows:

1. Is the action not frivolous or vexatious? Is there a serious question to be tried? Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial? All these question lay down the same test.

2. The Court must then consider whether the balance of convenience lies in favour of granting or refusing interlocutory relief.

3. As to the balance of convenience, the Court should first consider whether if the applicant succeeds he would be adequately compensated by damages for the loss sustained between the application and the trial, in which case no interlocutory relief should normally be granted.

4. If damages would not provide an adequate remedy, the Court should then consider if whether the applicant fails the defendant would be adequately compensated under the applicants undertaking in damages, in which case there would be no reasons on this ground to refuse any interlocutory injunction.

5. Then one goes on to consider all the other matters to the balance of convenience, an important factor in the balance, should be, other things being even, preserve the status quo.

6. When all things are equal it may be proper to take into account in tipping the balance the relative strength of each party’s case as reviewed by the evidence before the Court hearing the interlocutory application. 

In AGK Pacific (NG) Ltd -v- William Brand Anderson Karson Construction (PNG) Ltd & Downer Construction (PNG) Ltd N2062, His Honour Injia J cited with approval Kapi DCJ’s judgement in Employers Federation (supra) and held that:

An applicant for interlocutory injunction must satisfy two basic requirements:

"1. That there is a serious question to be determined.

2. The balance of convenience favours the grant of interim injunction in order to preserve the status quo."

In addition to the above principles, the applicant for injunction must file an undertaking as to damages. Failure to do will result in refusal of injunction. See Gobu Hongu -v- The National Executive Council and Others (1999) N1920, where His Honour Sevua J. said:

"the usual undertaking as to damages is a condition precedent to the granting of an interlocutory injunction. Such an undertaking must therefore be given by the applicant at the time of making the application, i.e. filed at the time of or prior to the making of application. The usual undertaking as to damages is given by the plaintiff who applies for an interlocutory injunction. It is a condition for obtaining the order to give the usual undertaking as to damages. Counsel have not referred me to any provision of the National Court Rules or any other Statute which provides for the undertaking, however, it has become the practice in this jurisdiction, as in New South Wales and other Jurisdictions that, an undertaking as to damages must be given."

It is clear in this case, the complainant had not given any undertaking as to damages. It was a failure on the part of the complainant which affects the restraining orders in place. In relation to what is an arguable case it was stated clearly by His Honour Andrew J. in Robinson -v- National Airline Commission [1983] PNGLR 476 at -480 as follows:

"What the plaintiff must prove is that he has a serious case, not a speculative case which has a real possibility of alternate and that he has property interests which might be jeopardized if no interlocutory relief were granted.

In order to determine this, the Court will have regard to such factors as the adequacy of damages, the possibilities of alternative remedies, whether there has been any laches and delay, the strength of the grounds of defence suggested by the defendant is prepared to give and most importantly hardship and balance of convenience."

In all the circumstances, I grant the motion filed by defendants on the 10th May 2005. I order that the interim restraining orders made by this Court on 1st April 2005 is set aside. The entire proceedings is dismissed as being frivolous and vexatious. The defendants shall have their costs of and incidental to these proceedings. As a result of this ruling the motion filed by Complainant on 20th July 2005 will serve no purpose and I dismiss the same as well.

Rules accordingly.

Young & Williams Lawyers: Complainant
Allens Arthur Robinson Lawyers: Defendant