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Melanesian Trustee Services Ltd v Tongayu [2021] PGNC 43; N8764 (16 February 2021)

N8764

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]
CIA NO. 90 OF 2018


BETWEEN:
MELANESIAN TRUSTEE SERVICES LIMITED
Appellant


AND:
ALEX TONGAYU as Chairman of Securities Commission of Papua New Guinea
First Contemnor


AND:
SECURITIES COMMISSION OF PAPUA NEW GUINEA
Second Contemnor


Waigani: Miviri J
2021: 10th February


PRACTICE & PROCEDURE – Judicial Review & Appeals – Contempt of Court – Against Natural and Body Corporate persons – No case to answer – Order subject of proceedings not drawn to alleged Contemnor – Mala fide as opposed to Bona fide no evidence – Evidence insufficient to call alleged contemnors to answer – Discretion to stop the Case – Evidence prima facie insufficient to call alleged contemnors to answer – Application upheld – Both alleged contemnors not guilty – Acquitted and Discharged – cost follow event.


Cases Cited

Income Tax Act 1959 (Amended), Re [1991] PNGLR 211

Pawa v The State [1981] PNGLR 498

Pep; Re Reservation of Points of Law under S21 Supreme Court Act (Ch37), The State v [1983] PNGLR 287

Avini v The State [1997] PNGLR 212

Kwimberi of Paulus M Dowa Lawyers v Independent State of Papua New Guinea [1998] PGSC 9; SC545

Rape, The State v [1976] PNGLR 96
Counsel:


J. Haiara, for Applicant

N Kopunye, for the Contemnors

RULING

16th February, 2021

  1. MIVIRI, J: This is the ruling on the Applicant’s Notice of Motion filed pursuant to Order 14 Rule 42 (1) of the National Court Rules that the First Contemnor Alex Tongayu and the second Contemnor the Securities Commission of Papua New Guinea be punished for contempt of Court in acting in wilful and deliberate breach of terms 2 and 3 of the National Court Orders made 13th March 2019 by Justice Nablu that:

By letter 22nd July 2019 the First Contemnor on behalf of the Second Contemnor, in his capacity as Acting Chairman of Securities Commission of Papua New Guinea on the false premise that “ the National Court had found Applicant does not have a valid Capital Market Licence to operate as a Trustee and fund Manager of Pacific Balance Fund and its subsidiary entities” directed ANZ Bank to place restrictions on Pacific Balance Fund and its subsidiary entities accounts contrary to terms 2 and 3 of the Orders of the National Court, in which term 2 of the Orders stayed earlier restrictions and directions issued by the First and Second Contemnors against the Bank accounts of Applicant, Pacific Balance Fund and its subsidiary entities under section 40 of the Securities Commission Act 2015 (“SCA”) constituted by First and Second Contemnors earlier letters dated 07th August 2018 and 07th December 2018 and term 3 of the order restrains the First and Second Contemnors from issuing any directions or restrictions pursuant to section 48 (6) of the Capital Market Act 2015 (CMA).


  1. Pursuant to the National Court Rules Order 14 Rule 42 (1), the First and Second alleged Contemnors be punished for Contempt of Court for Interfering with due administration of justice and or interfering with Applicant’s Legal rights pending determination in Court in these proceedings in that:-

On or about 19th July 2019, the First Contemnor had appointed the Second Contemnor, Securities Commission of Papua New Guinea, as the “ Statutory Trustee” of Pacific Balance Fund and its subsidiary entities and further appointed Mr. Michael Badui as an Investigation Officer pursuant to section 55 of the Securities Commission Act 2015, to investigate and seize the assets and properties of Pacific Balance Fund and its subsidiary entities, on a deliberate false allegation by the First Contemnor as an Acting Chairman of the Securities Commission of PNG (second Contemnor)


(i) That the National Court on 9th April 2019 in proceeding OS No. 55 of 2019 had found the Applicant does not have a Capital Market License to operate as a Trustee and Fund Manager of PBF; and

(ii) The applicant is “insolvent” in circumstances where the issue of whether or not Applicant is insolvent was subjudice in that it was a ground of appeal pleaded in Ground 3.3 of the Notice of Appeal pending determination in Court.
  1. Pursuant to National Court Rule Order 14 Rule 42 (1) the First and Second alleged Contemnor Mr Alex Tongayu and Securities Commission of PNG (the second alleged Contemnor) be punished for contempt in that:

On 10th July 2019 the First alleged Contemnor Mr Alex Tongayu in his capacity as Acting Chairman of the Securities Commission of PNG (the Second Alleged Contemnor) you published a false and misleading statement in the National Newspaper stating that “the National Court on the 9th April, 2019 found that Applicant does not have a Trustee Licence issued under the Capital Market Act 2015” and therefore “Applicant is not a holder of a current Capital Market Licence to act as the Trustee and Fund Manager of Pacific Balance Fund” in circumstances where:


(i) Your (First and Second alleged Contemnors) application to dismiss the within proceedings for inter alia alleged expiry of Applicant’s Capital Market Licence was refused and dismissed by Nablu J on 13th March 2019;

(ii) The National Court per Dingake, J in proceeding OS No. 55 of 2019 on 9th April 2019 “ did not find that the Applicant does not have a valid Capital Market Licence issued under the Capital Market Act 2015”

And those false Statements were made intentionally to interfere with an or undermine the due administration of Justice in this case and or to interfere with Applicants legal rights as Trustee and Fund Manager of PBF which are preserved by the Court orders of 26th October, 2018 and 13th March 2019 and pending determination in these proceedings.


Further and or alternatively pursuant to National Court Rules Order 14 Rule 42 (1) the First and Second Alleged Contemnors be punished for Contempt of Court for:


(i) Deliberately publishing false information in the National Newspaper on 10th July 2019 that on 9th April 2019 the National Court found the applicant does not have a trustee licence issued under Capital Market Act 2015, and

(ii) For Directing ANZ to restrict or freeze the bank accounts of Pacific Balance Fund and its subsidiary entities contrary to stay order of Thompson J of 26th October, 2018 and Nablu J of 13th March, 2019 by making deliberate false representation to ANZ Bank by letter dated 22nd July 2019 found that the appellant does not have a valid Capital Market Licence,’
  1. And those Statements were made:-
  2. Costs of the application on full indemnity basis against the first alleged Contemnor Mr Alex Tongayu.”
  3. The Statement of Charge dated 16th December 2019 filed the 17th December 2019 contained these charges laid against both contemnors in court. In each case all three charges were put to Alex Tongayu in person and representing the Securities Commission of Papua New Guinea of the three charges that were levelled against both persons. He heard and understood and each case entered not guilty pleas in all three charges preferred.
  4. The plaintiff called its evidence primarily in the witness on oath Lawrence Stephen through him two affidavits of his were tendered into court and marked exhibits P1 sworn 07th August 2019 filed 08th August 2019. And the second P2 sworn 16th December 2019 filed 17th December 2019.
  5. Here relevantly on the 10th July 2019 a Public Notice was published by the first Respondent contemnor in the National Newspaper informing the Public that appellant was no longer Trustee and Fund Manager of Pacific Balance Fund. And that the National Court on 09th April 2019 in proceedings OS No. 55 of 2019 found that the appellant does not have a Trustee Licence issued under the Capital Market Act 2015. And that the Appellant had been given sufficient opportunity to re-apply to its Capital Market Licence but has not supplied. That is annexure “LS9” to this affidavit.
  6. And OS 55 of 2019 is an interpleader proceeding filed by ANZ bank seeking to have the funds belonging to the Pacific Balance Fund paid into the National Court Trust Account due to conflicting directions issued by the First Respondent and Mr. Christopher T. Hnanguie to ANZ concerning bank accounts of PBF as Acting Executive Chairman of Securities Commission of PNG and Executive Chairman of Securities Commission of PNG respectively. This is annexure “LS10” of his affidavit.
  7. In that affidavit relevantly is the fact that the position of Acting Executive Chairman of Securities Commission of PNG and Executive Chairman of Securities Commission of PNG respectively was challenged in Court and leave was granted in each case challenged for Stay. Therefore, it was not firm that the first Respondent was firmly in that position in law to give the instructions that he gave and was the subject of publication in the media. There was a tussle over the position between the first respondent and one Christopher T Hnanguie v Hon Wera Mori & ors on the 12th July 2018 OS (JR) No. 277 of 2018. The Order Staying is annexure “LS13”. And the second is “LS15” in the proceedings OS (JR) No. 877 of 2018 Christopher T. Hnanguie v Hon. Prime Minister Peter O’Neill & ors. And the notices to the administration of the laws Capital Markets Act 2015 (CMA 2015 and the Securities Commission Act 2015 (SCA 2015) were published in the midst of this court challenge in particular by Christopher T Hnanguie exercising powers of both Acts firstly 22 to 23 February 2018 in the Post Courier. And pausing application for renewal and new application for Capital Market Licence on 06th May 2019 and 09th May 2019 in each case respectively as Legitimate Chairman of the Securities Commission discharging duties pursuant. It is important to note that both these proceedings were of obtaining leave there is no decision of this court as to what became of both substantive judicial review proceedings. It would settle the issue as to whether the First Contemnor was in the chair or not. This is an important fact towards his actions contended as contemptuous by the applicant/appellant.
  8. Further on the 22nd July 2019 at 9.00 am Lawrence Stephen confronted one Michael Badui who presented a gazettal notice signed by the First Respondent Alex Tongayu and two letters, one addressed to Michael Badui purporting to give him the powers that he was exercising there over the assets of MTSL in trust for PBF. And a second letter which was addressed to Lawrence Stephen. He did not accept the authority of the First Respondent contending that he was before the Criminal Court charged with Forgery and uttering in relation to the Gazettal notice appointing himself to the position of chairman of the Securities Commission. And there were a number of National and Supreme Court proceedings relating and there was uncertainty as to the appointment of the First Respondent to that position.
  9. And this continued on the 23rd July 2019 when Michael Badui led Police on the basis of these documents purportedly authorizing to demand the keys to motor vehicle by a staff member leading to the assault of another by police who accompanied and man handling another. The reliance was on the Gazettal that purportedly held out the First Respondent as the legitimate holder of the position authorizing Michael Badui to do what he was to take possession of PBF properties and MTSL properties. And this extended to the freezing of the operating accounts of PBF. And the letter by First Respondent is annexure “LS18” and “LS19” is by Denton Lawyers acting for the PBF advising with this attachment. Similarly, on the 2nd August 2019 the operating accounts of PBF at BSP were also frozen on the advice by the First Respondent to the Bank.
  10. Relevantly the affidavit of Lawrence Stephen sworn 16th December 2019 filed 17th December 2019, brings out the following facts, it had lodged an appeal against the decision with orders emanating from it on the 13th March 2019, entered 14th March 2013, and dismissed the motion of the First and Second Respondents. Secondly, it stayed the directions to freeze the accounts pending determination of the appeal filed by the Appellant/Applicant here. And restraint upon the First and Second Respondents from dealing further with the matter under the SCA 2015 Act until final determination of the appeal.
  11. There appears to be no dispute in the way that the First Respondent acted in the chair of the second Respondent. The issue unresolved at the heart is, whether or not, the First Contemnor acting in the seat of the Second Respondent was acting as he did mala fide. This is a question that will start with whether or not he personally was aware of the orders issued by this court in this matter CIA 90 of 2018 on 13th March 2019, annexure “G” of Lawrence Stephen’s affidavit. It is fundamental that the First Respondent in his individual personal capacity, and in his capacity occupying the chair of the Second respondent, was aware of the order annexure “G”. That underlies and sustains eventually as to whether or not, the First Respondent was personally, individually, aware and fully acknowledged of the order annexure “G”. And included in his Chair as chairman of the Second Respondent.
  12. In this regard the appellant/applicant has tried in vain to lead as to whether, or not, the First and Second Contemnor were in court, or were seen in court, or would have known of that order now at the heart contended to have been breached by them, individually and severely. In both affidavits of Lawrence Stephen set out above, there is no specific reference to this important and fundamental fact. There is more than beyond all reasonable doubt that the First Contemnor occupying the chair of the Second Respondent was discharging duties called for by relevant Legislation including, Capital Market Act 2015, Securities Commission Act 2015, and other related laws and Acts. It would appear from this evidence set out above, that he appears to have been confined to the dictate of what was called for by the laws set out above, vested on him in the chair as Second Respondent, that he occupied for and on behalf to do what he did, contended to by the applicant as amounting to contempt. But taking him as he is, if he was indeed versed with the orders, would he have acted as he did, I ask myself.
  13. And I do so bearing in mind section 115 Proceedings privilege of the Securities Commission Act 2015

PROCEEDINGS PRIVILEGE.

(1) No civil or criminal proceedings shall be brought against -

(a) the Commission; or
(b) the Chairman or Registrar; or
(c) the Commissioners; or
(d) any employee of the Commission or Registrar; or
(e) any expert appointed by the Commission,

for anything, it or they may do or fail to do in the course of the exercise or intended exercise of its or their functions, unless it is shown that it or they acted in bad faith.

(2) Neither the Chairman, the Commissioners nor an employee of the Commission, or any agent, or an expert appointed by the Commission, shall be required to give evidence in a Court, or in a proceeding of a judicial nature, in respect of anything coming to his knowledge in the course of the performance of his duties and functions under this Act.

(3) Nothing in Subsection (1) or (2), applies in respect of proceedings for -

(a) an offence against Sections 86, 87(1), 89, 90, 91, 92 or 93(1) of the Criminal Code Act (Chapter 262); or
(b) the offence of conspiring to commit an offence against Sections 86, 87(1), 89, 90, 91, 92 or 93(1) of the Criminal Code Act (Chapter 262); or
(c) the offence of attempting to commit an offence against Sections 86, 87(1), 89, 90, 91, 92 or 93(1) of the Criminal Code Act (Chapter 262).

(4) Anything said, or any information supplied, or an electronic device, computer, or any book or document produced, by any person in the course of any proceedings before the Commission shall be privileged in the same manner as if the proceedings were proceedings in a Court.

  1. It makes it even more fundamental to lead evidence that the alleged contemnors were mala fide as opposed to Bona fide section 115 (1) SCA Act 2015 (supra). And the evidence of their acts amounting to mala fide must be proved beyond all reasonable doubt. Because section 37 (4) (a) is clear the burden is on him who alleges. It is therefore incumbent upon the applicant/appellant even without hearing the contemnors on the allegation, it has been proved prima facie that indeed the allegations sustains even without hearing the contemnors: Pep; Re Reservation of Points of Law under S21 Supreme Court Act (Ch37), The State v [1983] PNGLR 287 (14 September 1983) reinforced restated in Avini v The State [1997] PNGLR 212 (15 July 1997). Disallowance not to make a no case submission is basis for error of law and for appeal to be allowed.
  2. And this is fundamentally clear when viewed respectively to contempt in Kwimberi of Paulus M Dowa Lawyers v Independent State of Papua New Guinea [1998] PGSC 9; SC545 (27 March 1998). In this regard what are his overt actions that lead to his knowledge acquiescence of the existence of the order set out in “G” above in the affidavit of Lawrence Stephen? It is clear he appears undeterred as if he is acting lawfully because of the administration acts that he sets in play to give effect to the various provisions of the law set out above, he administers in his role now the subject of contempt. It is therefore fundamental as to whether he was mala fide or bona fide in what he was doing so that the contempt charges sustains. Presumptions must be based on evidence not without: Income Tax Act 1959 (Amended), Re [1991] PNGLR 211 (5 July 1991). Because by section 37 (4) (a) there is a presumption of innocence and therefore the burden upon those who allege to prove by evidence what they allege. Because even if it were relied on circumstantially the law is crystal clear that there must be no other reasonable hypothesis other than the guilt of the accused: Pawa v The State [1981] PNGLR 498 (27 November 1981).
  3. What is clear by the evidence and which I find as a fact set out from the discussion above, is that the First Contemnor was not made aware, nor was he aware of the existence of that order annexure “G”. The same is clear against the Second Contemnor. The appellant/applicant has not provided evidence and material to prove beyond all reasonable doubt that the Accused were aware of the order and what they were required to do by that order. That is clear from the actions of the First Contemnor in the way that he has carried on particulars of evidence I set out above. It is clear he is clearly not aware, or else he would have seen the consequences and not carried on as evidenced above. The onus has not been discharged prima facie in view of all above, because the question posed is, whether on the evidence as it stands could the First and Second contemnors be lawfully convicted: Rape, The State v [1976] PNGLR 96 (17 March 1976). This is a question of law and therefore is really prima facie.
  4. What is underpinning is his knowledge and acquiescence of the existence of the order set out in “G” above in the affidavit of Lawrence Stephen. As it is his evidence does not extend to showing that the first Contemnor, let alone the second were indeed aware, and were drawn that fact so that their actions individually and severely were action set out above with that knowledge was clearly contemptuous.
  5. That is not the status of the evidence and the applicant has not discharged that burden in view of all above beyond all reasonable doubt. There are three counts against each Contemnor and the verdict is not guilty against both First and Second contemnors on all three counts against each preferred.
  6. The formal orders are:-

Orders Accordingly.
__________________________________________________________________
Haiara’s Legal Practice: Lawyer for the Appellants
Kopunye Lawyers : Lawyer for the Respondents

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