[2000] PNGLR 69

PAPUA NEW GUINEA

[national court of justice]

NATIONAL HOUSING CORPORATION

v

YAMA SECURITY SERVICES PTY LIMITED

waigani: sevua j
11, 25 August 2000

Practice and procedure — Injunction –– Application for interlocutory injunction — Undertaking as to damages not filed — No return date of injunction — Prejudice to defendant — Proper legal principles.

land registration — Title to land — Dispute as to ownership — Interim injunction to restrain eviction — Registered title — Indefeasibility of title — Land Registration Act, s 33.

Facts

The originating summons in this case was filed on 8 January 1998 and on 12 January 1998, the plaintiff filed a notice of motion seeking a restraining order ex parte against the defendant from evicting the plaintiff from the property located at Gordons, which order was granted on the same date. On 15 January 1998, the defendant filed a notice of intention to defend. On 4 September 1998, the plaintiff filed a notice to set-down for trial. However, no further action was taken by the plaintiff thereafter for two years and five months, after the injunction was issued, including failure by the plaintiff to file and serve an undertaking as to damages, which is a requirement for a plaintiff who is seeking an injunctive order.

Held

1.	It is a simple rule of thumb that an undertaking as to damages must be filed by the plaintiff applying for interlocutory injunction prior to the time of the application for injunction or soon after the order was granted. F. Hoffmann – La Roche & Co. A.G v Secretary of State for Trade and Industry [1925] AC 295 followed.

2.	The usual undertaking as to damages is a condition precedent to the granting of an interlocutory injunction. Gobe Hongu Limited v The National Executive Council & Ors (1999) unreported N1920 applied.

3.	It is trite law that, on an application for an interlocutory injunction, the plaintiff must satisfy the court that he has a serious case, not a speculative one, which has a real possibility of ultimate success and that the balance of convenience favours the plaintiff so that the injunctive relief could be granted in his favour. Robinson v National Airlines Commission [1983] PNGLR 476 followed.

4.	A litigant, especially a plaintiff, who initiated legal proceedings, has the obligation to ensure he prosecutes the proceedings without delay.

Papua New Guinea cases cited

Employers Federation of PNG v PNG Waterside Workers and Seamen’s Union & Ors (1982) unreported N393. 
Gobe Hongu Ltd v NEC & Ors (1999) unreported N1920.
Haro Yamis v Viviso Seravo, Minister for Lands & Ors (1998) unnumbered & unreported.
Robinson v National Airline Commission [1983] PNGLR 476.

Other cases cited

American Cyanamid Co. v Ethicon Ltd [1925] AC 396.
F. Hoffman – La Roche & Co. A.G. v. Secretary of State for Trade and Industry [1975] AC 295.
JT Stratford & Son Limited v Lindley [1964] 3 All ER 102.
Mullens v Howell (1879) 11 Ch.D. 763.

Counsel

J Nalawaku, for the defendant/applicant.

25 August 2000

Sevua j. On 11 August, I announced my decision in this matter and undertook to publish my full reasons later. This I now do.

By way of a notice of motion, the defendant sought orders that the restraining order obtained ex parte by the plaintiff on 8 January 1998, be set aside; all the orders sought in these proceedings be dismissed for want of prosecution; and costs.

The Court notes that there is no appearance by the respondent/plaintiff, although Mr Otto, who appeared as counsel on Wednesday, 9 August, during motions, when the applicant was to move its motion, was aware of the time and date of hearing, which is 11 August. The Court is not aware of the reason why the respondent is not represented. In any event, the Court is not going to wait for the respondent and its counsel. I think the failure of counsel to attend this morning clearly demonstrates the overall attitude of the plaintiff and its lawyers in this case. Be that as it may, the plaintiff and its lawyers must be prepared to accept any consequences, which may flow from this judgment.

The originating summons in this case was filed on 8 January 1998. On 12 January 1998, the plaintiff filed a notice of motion seeking a restraining order against the defendant from evicting the plaintiff from the property described as, Section 59, Allotments 6 and 7, Gordons. There is no order on both Court files, however, the file notation in one of the files reveals that the application was heard by the Deputy Chief Justice on 8 January 1998, who granted, "Order in terms of draft order dated 8 January 1998, as amended." There is an affidavit of service sworn on 27 January 1998, by counsel for the plaintiff, Epita Paisat, who deposed to serving the originating summons, affidavit of Ludwig Maliha, and the Order on Mr Kubak on 26 January 1998.

On 15 January 1998, Mr Kubak filed a notice of intention to defend on behalf of the defendant. On 4 September 1998, the plaintiff filed a notice of set-down for trial. Really, what I thought should have happened, was, that the injunction should have been returned to Court so parties could argue whether it should continue or be discharged. Since then, no activity has taken place. The plaintiff has taken no reasonable steps to proceed with this matter until the defendant filed this motion on 17 July 2000, some 2 years 5 months after the injunction was issued.

There are certain aspects of this case that concern this Court and those are matters relating to procedures and law which will be highlighted in this judgment because it seems quite obvious that the defendant had been prejudiced to this day.

The first matter to be highlighted here is the plaintiff’s failure to file and serve an undertaking as to damages. Either the plaintiff’s counsel then and now is ignorant or arrogant, but for his benefit, his attention is drawn to the requirement for filing an undertaking as to damages. The learned author of Injunctions: A Practical Handbook, N.R. Burns, (Law Book Company Ltd, 1988), says at p 16:

"A plaintiff who applies for an interlocutory injunction whether ex parte or after hearing is required, as a condition for obtaining the order to give the "usual undertaking as the damages"."

This is a simple procedural and legal requirement that a practitioner should know. In practice, if the undertaking is not filed prior to or at the time of the application for injunction, a usual verbal undertaking should be given and the undertaking filed soon after the order was granted. It is a simple rule of thumb, and I see no reason at all for the plaintiff not to have done this in January, 1998. There are many authorities both in this jurisdiction and in other jurisdictions on injunctions. But it seems obvious that many lawyers do not read judgments and do not carry out research, and this reflects badly on their case preparation.

Be that as it may, I consider that the undertaking as to damages works out both ways, and is not detrimental to the applicant in anyway. If he succeeds, he suffers no harm from having given the undertaking. However, if he fails, he will have to compensate the defendant for any loss the defendant suffers. I think the classic statement of the law pronounced by Lord Diplock in F. Hoffmann - La Roche & Co. A.G. v Secretary of State for Trade and Industry [1925] AC 295 at 361 clearly illustrates this point. Lord Diplock said:-

"Besides mitigating the risk of injustice to the defendant the practice of exacting an undertaking as to damages facilitates the conduct of the business of the courts. It relieves the court of the necessity of embarking at an interlocutory stage upon an inquiry as to the likelihood of the defendant being able to establish facts to destroy the strong prima facie case which ex hypothesis will have been made out by the plaintiff.

The procedure on motions is unsuited to inquiries into disputed facts. This is best left to the trial of the action, and if the plaintiff then succeeds in establishing his claim he suffers no harm from having given the undertaking, while if he fails to do so, the defendant is compensated for any loss which he may have suffered by being temporarily prevented from doing what he was legally entitled to do so."

In Hongu Limited v The National Executive Council & Ors (1999) unreported N1920, I discussed this issue. At p 6 of the judgment, I said, "The usual undertaking as to damages is a condition precedent to the granting of an interlocutory injunction. Such 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 the application." As the learned author Burns said, "it is a condition for obtaining the order to give the usual undertaking as to damages." The plaintiff failed to fulfil that requirement.

Counsel for the applicant, Mr Nalawaku, in his submissions, referred to Halsburys Laws of England, Vol 24 paras 854 – 8560 and raised the other two issues which I wish to address. These issues are, whether there is a serious question to be tried, and the balance of convenience.

In Gobe Hongu, I summarised several authorities on the law on injunction. I alluded to the relevant legal principles in J.T. Stratford & Son Limited v Lindley [1964] 3 All ER 102 as applied and expanded in the later case of American Cyanamid Co v. Ethicon Ltd [1975] AC 396, which principles received very good reception in Papua New Guinea. Those principles are set out in detail by His Honour, Kapi, DCJ in Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers and Seamen’s Union & Ors, unreported judgment of 11th October 1982, N393. I adopt those principles here, as I did in Gobe Hongu.

It is trite law that on an application for an interlocutory injunction, the Court must be satisfied that there is a serious question to be tried. That is, the applicant’s evidence at the hearing of his application must disclose material facts that he has a real prospect for succeeding in his claim for an injunction at the trial. The Court must be satisfied that the claim is not frivolous or vexatious. See American Cyanamid (supra) and, in particular, the judgment of Lord Diplock.

This very important principle is succinctly stated in Robinson v National Airlines Commission [1983] PNGLR 476 at 480, where His Honour, Andrew, J. said:

"What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardized if no interlocutory relief were granted. Then it becomes a matter of seeing if, in all the circumstances of the case, the court should nonetheless exercise its discretion by declining to issue an interlocutory injunction."

The affidavit sworn by Ludwig Maliha on 8th January, 1998 in support of the plaintiff’s application does not contain a copy of the lease or title over the property in question. Whilst the deponent had referred to the parties’ negotiations and a purported cancellation of the contract, he did not show, to the satisfaction of the presiding Judge hearing the ex parte application, that the plaintiff was the registered proprietor of the property. To my mind, that is quite important, and, it is my view too, that it goes to the question of whether the plaintiff has a serious case, and whether the balance of convenience favours the plaintiff so that the injunctive relief could be granted in his favour.

From that affidavit, I consider that the plaintiff did not have a serious case, but only a speculative case. He should not have been granted the injunction. In any event, if there had been a return date of the injunction, the order would have been dissolved, in my view. Even at this stage, I consider that the injunction should not continue and should be dissolved. I am of the view that the plaintiff did not have title to the property in question, and as it is now, the defendant’s evidence clearly revealed that it has title over the property. See annexures "B" and "C" of the affidavit of Jack Nalawaku, sworn on 7th August, 2000.

The next issue is whether the balance of convenience favours the granting of the injunction. Again, I refer to Gobe Hongu Ltd (supra) in which I adverted to the relevant principles set out by His Honour, the Deputy Chief Justice, in Employers Federation of Papua New Guinea (supra). The test adopted from J.F. Stratford & Son Limited (supra) is that having considered whether there is a serious question to be tried or whether the applicant has a serious case, the Court should then consider whether the balance of convenience favours the granting or refusal of the interlocutory injunction. The relevant principles are enumerated in paragraphs two to six inclusive in Employers Federation (page 4) and Gobe Hongu (page 5).

Having alluded to those very important legal principles, I am of the opinion that the balance of convenience in this case did not favour the granting of the injunction.

The defendant’s affidavit in support of this application filed on 8th August 2000, annexed copies of the contract of sale and transfer instrument which were duly approved under s 128 of the Land Act 1996. The contract of sale is dated 20th August 1993, and the Court takes judicial notice of the common seals of both the plaintiff and the defendant. The Court further takes judicial notice of the plaintiff’s seal affixed onto the transfer instrument evidencing a transfer of this lease to the defendant. The Court further takes judicial notice of the ministerial approval stamp dated 29th September 1993. The transfer was entered in the Registry of State Lease on 25th September 1997 at 11.30am.

I consider that since the injunction was granted upon an ex parte application on 8th January 1998, the defendant was not in a position to provide the evidence I have referred to above. In my view, if that evidence was available, it would have been provided to the Court on the return date of the injunction, however, the plaintiff never secured a return date for the injunction to return to Court so that the Court could provide an opportunity to the defendant to be heard. As it were, the defendant was never accorded that opportunity, therefore was never heard. However, the defendant has now produced the necessary evidence in this Court now, and it is my view that, having perused the evidence, there is no reason for the injunction to continue.

In my view, the balance of convenience neither favoured the plaintiff at the date of its application, nor does it favour the plaintiff now, so that the injunction could continue. I consider therefore that, the continuation of the injunction would continue to prejudice the rights of the defendant, and perhaps increase the defendant’s loss or damages. The injunction should therefore be dissolved.

I accept that the defendant has title to the property, the subject of these proceedings, and is therefore the duly registered proprietor of the property. It therefore has an indefeasible title over the land, Section 59, Allotments 6 and 7, Hohola, (Gordon).

The law in relation to indefeasibility of title is contained in Mudge and Mudge v Secretary for Lands and The State [1985] PNGLR 387. The Supreme Court held in that case that, "registration of lease under the provisions of the Land Registration Act Ch 191 is effective to vest an indefeasible title in the registered proprietor subject only to the exceptions enumerated in s 33." The Supreme Court followed the Privy Council decision in Fraser v Walker [1967] 1 AC 569 and said, "it is now settled law that apart from exceptions mentioned in the relevant legislations once land is under the Torrens System, the owner acquires indefeasibility of title."

I am satisfied that the subject land was registered under the Land Registration Act Ch 191, as is evident in the transfer instrument. That fact alone vests an indefeasible title in the defendant company. As the defendant is the registered proprietor of Section 59, Allotments 6 and 7, Hohola (Gordon), there is no justification for the injunction to continue.

In Haro Yamis v Viviso Seravo, Minister for Lands and Ors, unnumbered and unreported judgment of 9th November, 1988, I said at page 4 of the judgment, "an applicant must have a legal right or interest in or over a matter, the subject of a suit, which he seeks to protect by injunctive relief." I think the legal position is quite clear. In this case, the plaintiff simply has no right or interest to be protected by continuing the injunction.

The Courts power to discharge or permit a variation of the injunction is discretionary. Sir George Jessel MR said in Mullens v Howell [1879] 11 Ch. D. 763, at 766:

"the court has a jurisdiction over its own orders, and there is a larger discretion as to orders or interlocutory applications than as to those which are final judgments."

I would therefore exercise the Court’s discretion in favour of the applicant and order that the interlocutory injunction be discharged.

Even, if I am wrong in discharging the interlocutory injunction for the reasons alluded to, I consider that, it should be discharged and the whole proceedings be dismissed for want of prosecution.

I have already alluded to the factual background of this matter. I need only reiterate one or two points. Despite the fact that the interlocutory injunction was not returned to Court after 8 January 1998, the parties agreed to have the matter set down for trial. The relevant notice was filed on the 4 September 1998, six months more than the time stipulated by O 10 r 5 of the National Court Rules.

Court record shows that this matter first came before me on 5 March 1999. Mr Paisat appeared for the plaintiff. On 29 June 1999, there was no appearance by both parties. On 9 September 1999, no one appeared. So this matter has been to Court three times last year. It seems to me; the plaintiff has not taken any positive steps to prosecute this case, apart from agreeing to set it down for trial.

There is no explanation as to why the plaintiff failed to prosecute the case after setting it down for trial. It failed to attend call-overs on 29 June and 9 September 1999, to obtain a hearing date. Even then, what did the plaintiff do between 4 September 1998, and 10 August 2000? No explanation has been offered, and no reasons advanced as to why this matter has not proceeded to trial a little over one year ten months to the date of the defendant’s application.

Order 4 Division 4 of the National Court Rules deal with originating summons. Rule 36(1) deals with want of prosecution. It provides that "when a plaintiff … does not prosecute the proceedings with due despatch, the Court may stay or dismiss the proceedings."

As adverted to, 1 year 10 months have lapsed after the grant of injunction, and the plaintiff has not proceeded with due despatch to prosecute this matter, as required by the Rules. No explanation has been provided and I am of the view that the delay is inordinate, inexcusable and unexplained. A litigant, especially a plaintiff, who initiated legal proceedings, has the obligation to ensure he prosecutes the proceedings without delay. The Court registry is not to be used as a ‘dig and dump’ place for litigants to file proceedings and abandon them without proceeding to finality. The Court is not here to stockpile litigants’ unfinished business.

The Court’s power under O 4 r 36(1) and O 10 r 5 is discretionary. Nothing has been shown to the contrary as to why the Court should not exercise this discretion in favour of the defendant. The significant consideration here is that, there is no explanation by the plaintiff as to why it has not proceeded to prosecute its case with due diligence. In the exercise of the Court’s discretion, I would order that the whole proceedings be dismissed for want of prosecution pursuant to the combined effect of O 4 r 36(1) and O 10 r 5.

For these reasons, it is the judgment of this Court that the defendant’s application should be granted. The orders granted on 11 August 2000, are confirmed. These orders are:

1.	The restraining order obtained by the plaintiff ex parte on 8 January 1998, is hereby dissolved.

2.	The whole of the proceedings, OS 12 of 1998, are dismissed for want of prosecution in pursuance of the combined effect of O 4 r 36(1), and O 10 r 5 of the National Court Rules.

3.	The respondent/plaintiff shall pay the applicant/defendant’s costs of these proceedings to be taxed, if not agreed upon.

4.	The respondent/plaintiff shall pay the applicant/defendant’s counsel’s expenses of travel to and from Port Moresby, accommodation, and vehicle hire in Port Moresby, which expenses are directly related to this application.

Finally, I note that at the time of completing my reasons on 22 August 2000, an affidavit sworn by Roger G. Otto on 10 August 2000, was sighted in the file. The date of filing is 10 August 2000. Either the affidavit was filed on 10 August 2000 and left lying in the Registry, or someone has deliberately lied by stating that date as the date of filing.

I need to say this because, when the application was heard at 10am on 11 August, there was no affidavit by the plaintiff/respondent in the file. As alluded to earlier in this judgment, neither Mr Otto, who had appeared the previous day, nor anyone from the plaintiff’s lawyers’ firm, appeared to oppose the defendant’s application on 11 August. One would be forgiven for thinking that Mr Otto was out of Port Moresby, but that is not the case here, he was available the previous day and was aware, because both, he and Mr Nalawaku were told that the Court would hear the defendant’s application on 11 August at 9.30am. It goes without saying that if a litigant does not appear to prosecute or defend his case, he suffers the consequences.

The significance of making these remarks at the end of this judgment is that, the Court had derived no input or assistance whatsoever from the plaintiff’s lawyers, despite the fact that the plaintiff, through Mr Otto, was aware that the defendant would make this application on 11 August.

Orders accordingly.

Lawyer for the plaintiff: Patterson Lawyers.
Lawyer for the defendant: Jack Nalawaku.