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Mai Corp Ltd v National Airports Corporation [2015] PGNC 226; N6031 (24 July 2015)

N6031

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 375 OF 2015

BETWEEN

MAI CORP LIMITED trading as AEROPOM
Plaintiff

AND

NATIONAL AIRPORTS CORPORATION (NAC)
Defendant

Waigani: Makail, J
2015: 21st & 24th July

LANDLORD & TENANT – Tenancy dispute – Occupation of property within aerodrome land – Claim of right of occupation of property – Lease – Tenant occupying property without lease – Tenant at will – Right of tenant at will – Equitable interest

PRACTICE & PROCEDURE – Ex parte interim injunction – Extension of – Setting aside of – Principles of – Whether serious issues to be tried – Balance of convenience – Whether damages adequate remedy

Cases cited:

Airlines PNG Limited v. Air Niugini Limited (2010) N4047
Amos Bai v. Morobe Provincial Government [1992] PNGLR 150
Eastern Highlands Provincial Government v. Aiva Ivarato [1998] PNGLR 268
John Jivetuo v. The State [1984] PNGLR 174
John Koima v. Minister for Lands & Physical Planning & The State (2014) N5568
Koang No. 47 Limited v. Mondo Merchants Limited (2001) SC675
Koitaki Farm Limited v. Kemogo Kenge (2001) N2143
Pius Nui v. Jackson Laka (2012) N4698
PNG Ready Mixed Concrete Pty Ltd v. The State [1981] PNGLR 396
Sioti Bauf and Lovai Nodai v. Poliamba Pty Limited [1990] PNGLR 278

Counsel:

Mr B S Lai, for Plaintiff
Mr A Manase, for Defendant

RULING ON EXTENSION OF INTERIM INJUNCTION

RULING
24th July, 2015

1. MAKAIL, J: The Plaintiff alleged that it was promised a lease for a property within the aerodrome land at Jackson International Airport, 7 Mile in Port Moresby by officers of the Defendant after a three year lease for the same property between the previous tenant Delta Corporation Limited and the Defendant expired in November 2007 and Delta Corporation Limited moved out. The property comprises of a hanger type of structure which the Plaintiff has been using as an amusement centre (Club) for its members mostly staff from the nearby aviation companies.

2. After Delta Corporation Limited moved out, the Plaintiff took over the property and has been operating its business, paying rental of K3, 499.33 per month and in the meanwhile awaiting the promised lease to be given. On 19th June 2015 it was served with a notice to vacate dated 18th June 2015 by officers of the Defendant. The notice required the Plaintiff to vacate the property within 14 days. By that time, the Defendant had paid three months rental in advance for September, October and November 2015 in the sum of K10, 498.00.

3. On 02nd July 2015 officers of the Defendant including a group of security guards and policemen entered the property and affected the notice by removing office equipment, trading stock and items from the property. The Plaintiff asserted that because it was served the notice on 19th June 2015, 14 days expired on 03rd July 2015 and by which time; it had obtained the interim injunction restraining the Defendant from carrying out the eviction exercise. Based on this, the eviction was illegal. In any case, the eviction exercise was not completed on that date because not all of its equipment, trading stock and items were removed from the property and it is entitled to the protection of the interim injunction until the Court decide its claim of occupation of the property.

4. The Defendant denied the Plaintiff's claim. It asserted that it does not have a lease with the Plaintiff. The lease, the Plaintiff claims to have had, was between the Defendant and Delta Corporation Limited and it had expired in November 2007. The highest the Plaintiff can put its case is that it is a tenant at will. A tenant at will occupies a property at the pleasure of the landlord and can be asked to vacate the property at any time. On this basis, the relief sought by the Plaintiff in the nature of a declaration that it is a legal tenant of the property is without legal foundation and misconceived. As the Plaintiff is not a legal tenant of the property, a relief that is more likely to be granted in its favour is an order for further time to vacate the property.

5. This is because the Court will look at the period of notice given by the landlord to make sure that the occupant is given enough time to vacate. As to the period of notice, it depends on the length of occupation of the property by the tenant at will. The Defendant submitted that if the Plaintiff needs more time to vacate the property, it is prepared to give the Plaintiff a further 14 days to vacate.

6. It further submitted that the legal position of the Plaintiff clearly shows that it does not have a good case against it because there is no serious issue in relation to the right of the Plaintiff to occupy the property. Given this, the Plaintiff does not have a case which has a real possibility of ultimate success and parties would be wasting their time and money litigating the dispute. It asked that the interim injunction should not be extended but be set aside. However, the Plaintiff submitted that it has a legitimate expectation that it would be given a lease as promised by officers of the Defendant and the Defendant must now honour that promise. It asserted that as a party who has occupied the property over a long period of time and paying rent, it has an equitable interest such that its interest must be protected until the issue of occupation is decided by the Court.

7. On 03rd July 2015 on the application of the Plaintiff, the Court issued the order under consideration in the absence of the Defendant. As is usually the case in an ex parte hearing, not all the information is placed before the Court for it to have a balanced view of the case, although the onus is also on any Applicant to give full and candid disclosure of all information that are within the Applicant's knowledge, even if they do not favour the Applicant's case: Sioti Bauf and Lovai Nodai v. Poliamba Pty Limited [1990] PNGLR 278; Eastern Highlands Provincial Government v. Aita Ivarato [1998] PNGLR 268 and Airlines PNG Limited v. Air Niugini Limited (2010) N4047.

8. Now that the Court has had the benefit of receiving evidence and submissions from both sides, on the evidence before me, I am satisfied the Plaintiff does not have a legal right to occupy the property. It only has an equitable interest. That interest is described as a tenant at will because it does not have a lease with the Defendant such that it could rely on to assert a legal right to occupy the property. Unfortunately, the law puts a tenant at will's interest in the same category as a squatter settler. As in the case of a squatter, it has been held that a tenant at will has no right or interest over and above the rights and or interest of the landlord. This legal principle has been adopted and applied in this jurisdiction in past cases such as Koitaki Farm Limited v. Kemogo Kenge (2001) N2143; Koang No. 47 Limited v. Mondo Merchants Limited (2001) SC675; PNG Ready Mixed Concrete Pty Ltd v. The State [1981] PNGLR 396; John Jivetuo v. The State [1984] PNGLR 174 and Amos Bai v. Morobe Provincial Government [1992] PNGLR 150.

9. As a tenant at will, there is no real prospect of success for the Plaintiff to obtain an order for permanent injunction to restrain the Defendant from evicting it from the property. As correctly pointed out by the Defendant, the relief open to the Plaintiff is an order for further time to vacate the property and it would be open to the Court to grant it if it is sought by the Plaintiff. Such a relief, if granted, will be consistent with past decided cases some of which are cited above. In those cases, the Court gave time to occupants of land to vacate. However, the Plaintiff has not sought an order to that effect. Its case is built on the premise that it has a right to occupy the property and its interest must be protected. This is fatal to the Plaintiff's case. For the Court will be restricted to the relief sought by the Plaintiff in the Originating Summons. In a tenancy dispute, the Court will not protect a tenant who does not have a lease. If the Defendant is prepared to give a further 14 days to the Plaintiff to vacate, that will be a matter for the Plaintiff to consider.

10. The Plaintiff's assertion that it has a legitimate expectation that a lease will be issued to it by the Defendant has been denied by the Defendant. The evidence before me shows that there is some dispute in relation to the business activity of the Plaintiff. The Defendant asserted that the Plaintiff was allowed to occupy the property to run a Pilot Training School and the social and recreation side of things was secondary. One of the preconditions of a lease near the apron where hangers are located is for a tenant to have a valid Air Operators Certificate and a Maintenance Operators Certificate.

11. Given the nature of the business activity of the Plaintiff as a Pilot Training School, an additional requirement is that it must possess an Aircraft Registration Licence from the PNG Civil Aviation Safety Authority. The licence is to confirm that the Plaintiff does have an aircraft which is used to train trainee pilots. The Defendant submitted that it has not received any of these documents from the Plaintiff. This shows that the Plaintiff has deviated from its original purpose for occupying the property and this is illegal. Further, these documents are not in evidence before me. The onus of proof is always on the Plaintiff to prove its case and the absence of these documents does not support its claim that it is more likely to be given a lease by the Defendant and it would be in the interests of both parties that the interim injunction is extended pending the grant of the lease.

12. The evidence of the Defendant is that the National Government proposes to build a new Jackson International and Domestic Airport in accordance with Jackson Airport Master plan in preparation for the APEC Summit in 2018 and to also cater for increased traffic volumes into the future. For the re-development project code named JT 2030, the Defendant will need to re-organise the limited space and tidy up the apron frontage. Non-core aviation related entities must make way for current aviation entities that have valid air operations certificate which are supporting resource projects, rural services and logistics businesses. Running a social and recreation business is a non-core aviation activity and also the business is at a wrong location.

13. Given the events of late, the Defendant has decided to move on. It has a plan in place to lease the property to Air Sanga and Government Flying Unit who are certified aircraft and airline operators by the Civil Aviation Safety Authority. On the other hand, the Plaintiff's evidence shows that it employs a total of 29 full-time staff and supports many others and to have it vacate the property will be detrimental to them as it will be forced to lay them off. This would affect their families that they support and cater for with their wages that it pays them with. The Plaintiff has also financially supported community initiatives such as the Police Legacy and recently contributed K10, 000.00 to the Legacy. In recognition of that, it was awarded a Queens Honour Award.

14. Balancing two competing interests is not always easy especially when lives of individuals or business interests are at stake. At the end of the day, a decision will have to be made: one party's interests will have to prevail over the other. In this case, the interests of the Defendant should be given preference over the Plaintiff's interest because it needs to utilise the limited space available near the apron area for the airport re-development project which must be completed before the APEC Summit in 2018. Not only that but the Plaintiff's business activity of social and recreation club does not feature in the Defendant's vision 2030 as it is considered a non-core aviation related activity. Priority is given to core aviation activities such as aviation companies supporting rural services. I consider this kind of services important for our rural population where there is no other means of transportation except by air and the Defendant must be allowed to continue to support it. All in all, it's putting the public interest first for the good of everyone.

15. I make this decision in line with my decision in an earlier case in John Koima v. Minister for Lands & Physical Planning & The State (2014) N5568. That was a case where the State needed the land between Erima and Waigani to build the first ever flyover in the country and had to evict leaseholders who resisted giving up their land for the construction of the flyover to begin. One of them was Mr John Koima. He obtained an interim injunction and restrained the State from evicting him from the property until the State pay him K6.4 million as compensation even though the State had offered an alternative piece of land and a house to be built at the State's own expense, K215,000.00 for the land and K615,000.00 for improvements. His property consisted of a block of units for rental accommodation, retail-shop and a mini-food bar. The order was subsequently set aside. One of the reasons was that it was in the public interest that the order be set aside so that the land could be freed up to allow for the construction work to begin. The setting aside of the order led to the construction of the flyover and its completion in time for the 2015 Pacific Games which had just ended almost a week ago.

16. The Plaintiff also asserted that when the Defendant evicted it from the property on 02nd July, the officers and security personnel did not only destroy its trading stock and items but also conducted an illegal search of its office whereby they opened a safe and removed cash. In the process, they assaulted the Plaintiff's Director Captain Phillip Leonard Marshall. The Defendant refuted these assertions by explaining that Captain Marshall provoked the assault when he drew a firearm (pistol) and threatened to shoot its officers. That was when he was subdued and disarmed by two policemen and later taken to the police station where he was arrested and charged with various offences relating to the firearm.

17. In a case where a party is applying for an interim injunction or seeking its extension, the Court must also consider whether damages would be an adequate remedy. If damages would be an adequate remedy, it would almost be unlikely that an injunction will be granted or extended. In this case, I consider that the Plaintiff's remedy for the destruction of its trading stock and items including the stolen cash is in damages. It may also seek reimbursement of the three months rental advanced to the Defendant. If it has put up improvements on the property, it is open to it to claim damages against the Defendant for the value of the improvements. As to whether it will successfully recover its damages is a matter for another day. For now, all these different heads of damages can be a subject of a separate action against the Defendant: see Pius Nui v. Jackson Laka (2012) N4698.

18. Similarly, the remedy for Captain Marshall for the assault on him lies in damages. He may sue the Defendant and its officers for damages for the assault. Finally, the arrest and charge of Captain Marshall for criminal offences is a matter for the police to deal with. For these reasons, I am satisfied that damages would be an adequate remedy for the Plaintiff.

19. Having carefully considered all these matters, I am not satisfied that the interim injunction should be extended. It is set aside forthwith. Costs shall be in the cause.

Ruling and Orders accordingly.

____________________________________________________________
B S Lai Lawyers: Lawyers for the Plaintiff
Manase & Co Lawyers: Lawyers for Defendant