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Bewani Palm Oil Development Ltd v Bewani Oil Palm Plantations Ltd [2019] PGNC 122; N7855 (9 May 2019)

N7855

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 892 OF 2018 (CC1)

BETWEEN
BEWANI PALM OIL DEVELOPMENT LIMITED
Plaintiff

AND
BEWANI OIL PALM PLANTATIONS LIMITED
First Defendant

AND
BEWANI FOREST PRODUCTS LIMITED
Second Defendant

AND
KANAWI POURU, in his capacity as Managing Director
of Papua New Guinea Forest Authority
Third Defendant

AND
PAPUA NEW GUINEA FOREST AUTHORITY
Fourth Defendant

AND
THE INDEPENDENT STATE OF PAPUA NEW GUINEA
Fifth Defendant

Waigani: Dingake J
2019: 28 February & 19 March

INJUNCTIONS – Applicant Seeks Interim Injunction - applicable principles on the granting or refusal of an interim injunction and their application – consideration of - balance of convenience favours the refusal of the relief sought – application dismissed

Cases Cited:
Papua New Guinea Cases

Hargy Oil Palm v Ewasse Landowners Association Inc (2013) N5441
Ted Taru v Pacific MMI Insurance Ltd (2016) N6305
Rex Neapukali Kemben v Nan Jiang (PNG) Holdings Ltd (2018) N7113
Gobe Hongu Limited v The national Executive Council & Ors N1920

Overseas Cases

American Cyanamid Company v Ethicon Limited (1975) 1 ALL ER 594

Counsel

Mr. Sam Koim, for the Plaintiff
Mr. Jason Brooks, for the Defendants

9^th May, 2019

1. DINGAKE J: This is an application for an interim injunctive relief.
2. The principal relief sought is captured in paragraph 2 – 6 of the applicant/plaintiff notice of motion, namely:
   1. An Interim Injunction pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution, restraining the first and second Defendants, and their agents and servants, from conducting any logging operations and selling of logs within Portion 160C, FCA 10-03 area, pending the hearing and determination of this proceeding.
   2. An Interim Injunction, pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution, restraining the third, fourth and fifth defendants, and their agents and servants, from granting any approval, permit or licence to the first and second defendants to harvest and sell logs within FCA 10-03 area without the express consent and approval of the plaintiff, pending the hearing and determination of this proceeding.
   3. An order pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution and the inherent powers of this Court, directing the fourth and fifth defendants to undertake an investigation into the conduct of the first and second defendants pending the outcome of this proceeding.
3. The material facts of this litigation can be stated briefly. The plaintiff, an umbrella land owner company, representing, the landowners of the Bewani Oil Palm Project in the Sandaun Province, is the holder of a 99 year Special Agriculture Business Lease (SABL) granted on the 17^th of July, 2008, with respect to a piece of land situated in Bewani, Sandaun Province, described as Portion 160C.
4. On the 26^th of October, 2009, the plaintiff was granted a Forest Clearance Authority (FCA) by the National Forest Board, and subsequently, signed a project agreement with the first defendant.
5. The aforesaid agreement recorded that, Portion 160C was subleased to the first defendant for 99 years to develop the said piece of land into an Oil Palm Plantation.
6. In terms of the agreement, the plaintiff and four other Landowner companies, also agreed to allow the first defendant to harvest and sell logs during the clearing of land for planting of the oil palm trees.
7. It would seem that in the course of time the first and second defendant entered into a Logging and Marketing Agreement, in terms of which the defendants conducted logging operations on the piece of land, being Portion 160C, earlier mentioned.
8. The plaintiff avers that the defendants have without their knowledge engaged in secretive and random harvesting of logs, outside the segmented areas but no oil palm trees has been planted in its place.
9. The plaintiff avers that the defendants are engaged in logging operations day and night.
10. The logging complained of, which the applicant avers is illegal, because it is not authorised by the Project Agreement, is said to cover an area of about 45000 hectares as of June, 2018. The applicant wants this Court to, among others, stop the illegal logging complained of.
11. The application is vigorously opposed. The first and second defendants, in response, contend that the application is an abuse of process and ought to be dismissed in that:
    1. There has been a multiplicity of proceedings brought by the plaintiff and individuals who are all connected, arising from the same factual issues and seeking similar relief;
    2. There are existing Court Orders in other proceedings to which the plaintiff is a party, which on their face clearly do not allow the plaintiff to seek the relief claimed in the Originating Summons herein.
    3. The proceedings seek orders which are all potentially time barred.
    4. The proceedings have been issued without the consent of the landowners themselves; and
    5. The proceeding is clearly and fundamentally in breach of the Mediated Agreement signed on 10^th August, 2018.
12. On the evidence, it seems plain, and I so find, that there has been a multiplicity of proceedings, arising from the same factual issues as in this application, by various parties to injunct logging, including the plaintiff, in WS No. 733 of 2015. The plaintiff has also on several occasions been involved as the first defendant in proceedings by other parties, to among other things, injunct the loggings by first and second defendants.
13. It is plain on the evidence that there are existing Court Orders in other proceedings, other than WS No. 733 of 2015, of which the plaintiff/applicant is one of the defendants, and which proceedings do not allow the plaintiff to seek the relief claimed in the Originating Summons.
14. I do not think much turns on the first and second defendant’s complaint that these proceedings have been issued without the consent of the Landowners.
15. I do however find the terms of the Mediated Agreement of 10^th August, 2018, between the parties relevant to this application as I shall demonstrate in due course.
16. The first and second defendants argue that the actions of the plaintiff in commencing proceedings OS No. 892 of 2018, amounts to breach of Mediated Agreement of the 10^th of August, 2018.
17. I have considered the terms of the Mediated Agreement in so far as this current application is concerned. It is plain that by Clause 4.8 the plaintiff agreed not to commence new proceedings in relation to Bewani Oil Palm Project, and by Clause 4.9 the plaintiff agreed not to seek any further injunctions to stop the Bewani Oil Palm Project. The aforesaid paragraphs provide that:
    • “4.8 The parties agree that there will be no new legal proceedings commenced in relation to the Bewani Oil Palm Project within Portion 160C.
    • 4.9 The parties agree that there will be no further applications for injunctions which seek to stop the Bewani Oil Palm Project within Portion 160C.”
18. It is trite learning that as a general rule agreements reached at mediation are legally binding and enforceable. (Hargy Oil Palm v Ewasse Landowners Association Inc (2013) N5441; Ted Taru v Pacific MMI Insurance Ltd (2016) N6305; Rex Neapukali Kemben v Nan Jiang (PNG) Holdings Ltd (2018) N7113).
19. I have not seen anything that excuses the plaintiff/applicant from complying with the terms of the agreement, (Mediated Agreement) and none has been pointed to me.
20. Having traversed the essential facts underpinning this application, I turn now to the applicable principles on the granting or refusal of an interim injunction and their application.
21. It is important to state upfront that the remedy sought by the plaintiff, interim injunction, is a discretionary one, which may be granted if the Court is persuaded it is in the interest of justice to do so. (American Cyanamid Company v Ethicon Limited (1975) 1 ALL ER 594).
22. The prerequisites for the granting of an interim injunction are as follows:
    1. There is a serious question to be tried or determined at a final hearing.
    2. Damages would not be an adequate remedy.
    3. The balance of convenience favours the grant of an interlocutory injunction.
    4. The applicant has to provide an adequate undertaking as to damages (see also Gobe Hongu Limited v The national Executive Council & Ors N1920 per Servua J.).
23. The ever present dilemma for any Court considering whether to grant an injunction is the risk that the Court may grant an injunction and the plaintiff may later on, when the matter proceeds to trial, fail to establish his right. This requires that the Court should proceed with caution when dealing with interim injunctions.
24. In this case, although, they may well be a serious question to determine at a final trial on the face of the evidence so far tendered by the parties, it seems to me that granting the injunction sought may well trigger heavy losses, running into Millions of Kina, by first and second defendants. The State may also suffer loss of royalties, running into millions of Kina and employees engaged by the defendants may be adversely affected.
25. I have also considered whether damages may be adequate remedy, in the event interim relief is refused, and applicant later establishes at a trial, his right to a permanent injunction, or some other appropriate relief. I have considered that having regard to the length of time the project has been in place and that over the period stakeholders have received over K30 Million Kina in royalties and other payments, damages would, in this case be an appropriate remedy. I am therefore inclined to refuse the interim relief sought on this ground alone.
26. It also appears to me to be less risky to refuse the injunction sought, given the possible losses that the first and second defendants may incur as indicated above, (if I were to grant the relief sought). In my mind, the balance of convenience favours the refusal of the relief sought.
27. On a balance and for all the reasons stated above, I am inclined to exercise my discretion in favour of a less risky path by refusing to grant the injunction sought.
28. In the result, the formal Orders of this Court are that:
    1. The entire proceeding is dismissed.
    2. Costs, on a party to party scale, are awarded in favour of the first and second defendants against the plaintiff.
    3. The time for entry of these orders is abridged to the time of settlement by the Registrar which shall take place forthwith.

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