National Court of Papua New Guinea

11. The principles upon which this Court can grant an interlocutory injunction are well settled. The leading authority is a decision of the House of Lords in American Cyanide Company v Ethicon Limited5) [1975] UKHL 1; 1 ALL ER. 504. 504. &#his cas been been followollowed on many occasions in this jurisdiction, and cited with approval by the Supreme Court in Craftworks Niugini Pty Ltd v Allan Mott [1998] PNGLR 572.
sobinson v National onal Airlines Commission [1983] PNGLR 478 at 482 Andrew, J. stated

"What the Plaintiff must prove is that he has a serious, not a speculacase has l possibilitbility of y of ultimultimate success..."

13. In Markeal Limited & Robert Needham v Mineral Resource Development Co. Pty Ltd N1742 Doherty, J. described this as:

".... a strong case which, on the evidence presented would support a permanent injunction".

14. PEIL claims that the meeting of unit-holders and the resolution that PEIL be removed as Fund Manager were unlawful as inter alia, MTSL did not serve upon PEIL a written notice to show cause pursuant to Article 8 of the Deed of Appointment between MISL and PEIL dated 16 May 2002.

15. PEIL contends this was necessary as the Notice of Meeting from MTSL refers to MTSL becoming aware of material breaches of the Trust Deed by PEIL.

16. MTSL and NFSL contend that the "Show Cause" provisions of Article 8 of the Deed of Appointment are an entirely different set of provisions allowing for the removal of PEIL and are distinct and separate from the provisions of cl. 21(l) upon which MTSL convened the meeting held on 14 July 2006.

An example of this the defendants say, is when MTSL had previously served a notice to show cause on PEIL on 3 February 200lowing pubg publication of an audit report by PricewaterhouseCoopers.

17. An examination of Article 8 of the Deed of Appointment and Clause 21(l) of the Trust Deed appears to bear out. Article 8 le 8 does not rtoer to cl 21(l) and there is no requirement in Article 8 for MTSL to call a meeting of unit-holders. Why would an allegea bref h of Article 8 cause a meeting convened under cl 21(l) to be unlawful?

18. PEIL contends that as the meeting on 14 July 2006 was not convened within 42 days of the date on which MTSL first received actual notice of the occurrence of breach by PEIL the meeting is unlawful.

19. The Defendants contend that it was physically and logistically impossible to convene the meeting within 42 days due to various factors including:

(a) PEIL not maintaining a proper register of unit-holders.

(b) The Electronic Register of unit-holders provided by PEIL required extensive formatting taking at least 2 weeks to complete before the mail out process could be commenced.

(c) A further 3 ½ weeks was then required to copy 12 papers of documents, put addresses on labels and fold and insert documents into envelopes for about 30,000 unit holders.

20. The Defendants further contend that the "42 days" requirement in cl 21(l) of the Trust Deed is a covenant with the Manager by the Trustee in relation to the Trust, "with the intent that the benefit of these covenants enures not only to the Manager but to the unit holders of the Trust jointly and to each of them severally....".

21. How has PEIL suffered as a result of the meeting being convened 52 days instead of42days after MTSL first receives actual notice of the occurrence of a breach by PEIL? Has not PEIL been given more time? NFSL and other Unit Holders are not contending that they are disadvantaged.

22. PEIL contends that pursuant to cl 26.5 of the Trust Deed except where the Fund Manager convenes a meeting, the Fund Manager must be given notice of the meeting, that PEIL was not given notice and therefore the meeting is invalid.

23 Defendantsdants contend that PEIL does not have an arguable case for substantive relief on this poin60;as Mr. John John Ruhe Mag Director of PEIL acknowledged that he received copies of the formal written notn notice oice of the meeting signed by the General Mr of MTSL with attachments about 5 weeks prior to the meetimeeting on 14 July 2006 and annexed that document to his own affidavit.

24. PEIL contends that in cl 26.7 of the Trust Deed there is a requirement that a notice of meeting provide sufficient information to enable a unit-holder "to form a reasoned judgment" in relation to the business to be transacted and that the notice did not contain such information providing only one version which did not permit "reasoned judgment".

25. The Defendants contend that the requirements of cl 26.7 and Sch 2 of the Companies Act were complied with. The notf meecong containedained a brief response from PEIL to each and every allegation made against it and contained information that mply cient for unit holders to understand the general nature of the business to be cone conducteducted at the meeting and to form a reasoned judgment in relation to it. Even if this was not the case, the Defendants contend, PEIL conducted its own mail-out to unit-holders of information it wanted to be considered.

26. The evidence before me is given on affidavit and has not been tested by oral cross-examination. As Lord Diplock said in American Cyanide (supra). & "It is not part of the cohe courts function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claimeither party may ultimately depend nor to decide difficult cult questions of law which call for detailed argument and mature considerations".

27. Having considered the arguments of all parties and the affidavit evidence relied upon I am of the view that PEIL has not made out a serious question or questions to be tried; that is, a serious not a speculative case which has a real possibility of ultimate success, or a strong case which, on the evidence presented, would support a permanent injunction or the substantive relief sought.

28. To allege, as PEIL is, that it is entitled to the relief sought as it did not have proper notice of the meeting, the meeting was not called in time and the unit-holders did not have sufficient information "to form a reasoned judgment" when it is common ground that PEIL had actual notice of the meeting some 5 weeks before hand, had sent its own notice of explanation to unit-holders before the meeting and had its lawyer address the meeting, does not persuade me that PEIL has a serious question to be tried and I find accordingly.

29. Having so decided, it is not necessary for me to consider the next question which is whether the balance of convenience lies in favour of granting or refusing the interlocutory relief sought.

30. In any event, the first consideration in determining the balance of convenience is whether, if PEIL were to succeed at trial in obtaining the substantive relief sought, it would be adequately compensated by an award of damages for any loss sustained between being refused the interim relief sought and obtaining substantive relief.