SC1312

PAPUA NEW GUINEA
[IN THE SUPREME COURT OF JUSTICE]
SCA NO. 54 OF 2012

BETWEEN

AMANAB FOREST PRODUCTS LIMITED
Appellant

AND

JOHN KOHIP, NOCKY KOHIP, NAWAI YAFI, JEROME AME, for and on behalf of the Waramalyu and Killfas Villagers, Bewani District, Sandaun Province
Respondents

Waigani: Gavara-Nanu J, Gabi J & Yagi J
2013: 27th August
2014: 19th February

CIVIL APPEAL – appeal against interlocutory order – order refusing an application for interim injunctive relief with costs – Supreme Courts Act, s. 14(3)(b)(ii) – leave to appeal not required.

CIVIL APPEAL – interlocutory judgement - appeal against discretionary judgment – principles considered and applied – appellant Court will not interfere with an exercise of discretion unless it is unreasonable and plainly wrong– onus on appellant to demonstrate identifiable error – no identifiable error shown. 

PRACTICE & PROCEDURE – application for interim restraining orders – application earlier refused on grounds of technicality and demerits – fresh application made based on new evidentiary material – evidentiary material available at time of making earlier application - whether fresh application amounts to an abuse of process – new evidentiary material vague and inconclusive – no error committed by the trial Judge.

INJUNCTIONS – injunction is an equitable relief or remedy - exercise of the Court's power to grant an equitable relief is discretionary – principles for grant of injunctions considered – serious question or issue to be tried - injunction not to be granted if damages adequate remedy – balance of convenience – alleged breach of agreement - no agreement between disputing parties – no serious issue to be tried – no error in exercise of discretion.

Facts:

The appellant conducts logging operations within Blocks 1, 2, 3 and 4 pursuant to the Amanab Forest Management Agreement. It has the requisite approvals, permits and agreements to operate in that area. One of its contractual obligations is to build and maintain roads and bridges including the Vanimo-Green Highway.

The respondents are representatives of customary owners of land from Blocks 
5 & 6 within the Amanab Forest Management Area. The appellant does not conduct logging operations in that area. The logging operation is conducted by another company. The respondents made demands for compensation including threats against the appellant for using their land. 

The appellant applied for interim restraining orders against the respondents. It relied on certain timber authorities, permits and agreements to assert its claim of right to use the land within Blocks 5 & 6. The Court refused the application on the grounds that (i) the notice of motion was defective in that the correct jurisdictional basis of the Court was not stated and (ii) there was no serious issue to be tried because there is no agreement for the use of the land between the parties.

The appellant subsequently filed a fresh application seeking substantially the same restraining orders but relying on another agreement. The trial Judge refused the application on the basis that the application was an abuse of process.

The appellant appeals against the refusal of the fresh application.

Held:

1. On an appeal against an exercise of a discretionary power by a trial Judge the appellant must demonstrate that there is an identifiable error. The appellant Court will not interfere with the trial Judge's discretion unless it is unreasonable or plainly wrong. Curtain Bros (PNG) Ltd vs. UPNG (2005) SC788 followed.

2. The trial Judge did not err in the exercise of his discretion.

3. The appeal is dismissed with costs.

Cases cited:

Papua New Guinea Cases
Chief Collector of Taxes vs. Bougainville Copper Ltd (2007) SC853
Craftworks Nuigini Pty Ltd vs. Allan Mott (1997) SC525
Curtain Bros (PNG) Ltd vs. UPNG (2005) SC788
Ewasse Landowners Association Incorporated vs. Hargy Oil Palms Limited (2005) N2878
Gobe Hongu Limited vs. The National Executive Council & Ors (1999) N1920
Golobadana No.35 Ltd vs. Bank of South Pacific Ltd (2002) N2309
Isaac Lupari vs. Sir Michael Somare (2010) SC1071
National Capital District Commission vs. Yama Security Services Pty Ltd (2003) SC707 
Ron Napitalai vs. PNG Ports Corporation Ltd & Ors (2010) SC1016
State vs. Sam Akoita & Ors (2009) SC977
William Duma vs. Eric Meir (2007) SC898

Overseas cases
American Cyanide Company vs. Ethicon Limited (1975) 1 All ER 594

Counsel: 

N. Kopunye, for the Appellant
N. Kere (with K. Najike), for the Respondents

JUDGEMENT

19th February, 2014

1. BY THE COURT: Introduction: The appellant appeals from the whole of the decision of His Honour Justice David given on 6th and 10th April 2012 in the National Court proceeding OS No. 134 of 2011 wherein the Court dismissed the appellant's notice of motion filed on 9th November 2011 and awarded costs against the appellant on solicitor/client basis. 

Facts 

2. The brief background facts were that on 9th March 2004, the State (through the Papua New Guinea Forest Authority) entered into a Project Agreement with the Vanimo Forest Products (hereinafter "VFP") for Blocks 1, 2, 3 & 4 of the Amanab Forest Management Agreement (hereinafter "FMA") area. On 21st June 2004, the State granted Timber Permit No. PNGFA TP 10-1 (hereinafter "Timber Permit") to VFP to conduct logging in Amanab FMA Blocks 1, 2, 3 & 4 (hereinafter "Project Area"). On 20th January 2006, the Timber Permit was transferred to the appellant from VFP and so the rights and obligations under the Timber Permit and the Project Agreement passed to the appellant. On 25th March 2009, the terms of the Timber Permit was extended for 35 years commencing on 1st January 2008. One of the conditions under the Timber Permit was for the appellant to build and maintain roads and bridges including the maintenance of the Vanimo-Green Highway (hereinafter "Highway"). The respondents are from areas outside the Project area. They are from Amanab Forest Management Area Blocks 5 and 6. The appellant does not conduct logging operations in Blocks 5 & 6. Amanab 56 Timber Investments Ltd (hereinafter "Amanab 56") conducts logging operations in Blocks 5 & 6. The appellant alleged that the Highway runs into Block 5. The appellant further alleged that Amanab 56 accepted its request and allowed it to use roads within Amanab Blocks 5 & 6. In January 2011, the respondents threatened to block the Highway unless the appellant meet their demands. The demands amount to some K4million.

3. As a result of the threats to block the Highway, the appellant filed the proceeding OS No. 134 of 2011 seeking a number of declaratory orders. The appellant sought orders that it is entitled to build maintain and use roads and bridges within Blocks 1, 2, 3 & 4, that the roads and bridges are for public use, that any act of the respondents to prevent, hinder or obstruct the appellant is unlawful and that the respondents and their agents are permanently restrained from preventing, obstructing or interfering with the appellant. It also filed a notice of motion on 23rd March 2011 (hereinafter "first application") to restrain the respondents and their agents from preventing, obstructing or interfering with the appellant from using roads and bridges "constructed by it pursuant to the Timber Permit No. 10-1 dated 21 June 2004 and the Project Agreement dated 9 March 2004." We should add that the Timber Permit and the Project Agreement relate to Blocks 1, 2, 3 & 4.

4. On 7th October 2011, the first application was heard by His Honour Kariko J. On 17th October 2011, His Honour Kariko J dismissed it on two grounds: (i) the motion was incompetent as it was based on wrong jurisdictional ground; and (ii) there was no agreement between the State, the appellant and the respondents for the appellant to develop the land or build roads on it. In other words, the appellant did not have an arguable case and its action had no real prospect of succeeding at trial.

5. On 9th November 2011, a second notice of motion (hereinafter "second application") was filed by the appellants seeking restraining orders again. In the second application, the appellant was seeking to restrain the respondents and their agents from "preventing, obstructing or interfering with the plaintiff from using roads and bridges constructed by the plaintiff in Blocks 5 and 6 of the Amanab Forest Management Agreement area..." On 14th December 2011, His Honour David J heard the application. On 10th April 2012, His Honour David J dismissed the application on the ground that it was an abuse of process. He was of the view that the appellant ought to have appealed against the decision of His Honour Kariko J not to apply again as the National Court has no jurisdiction to review the decision of another National Court. Secondly, the material placed before him was not new and there was no change in circumstances. 

Grounds 

6. The grounds of appeal are set out below:

(a)	 The Learned Judge erred in law and in fact by refusing to grant orders sought by Appellant in the Appellant's Notice of Motion (filed 9 November 2011) on the grounds of abuse of process for having a second bite at the cherry when:

(i)	at law, there is no principle known as having a second bite of the cherry;

(ii)	he found that the Appellant was not barred from making the application for interim injunction on grounds of res judicata;

(iii)	he found that the Appellant's previous Notice of Motion filed on 23 March 2011 was dismissed by His Honour Kariko J on a technicality (i.e..for being incompetent);

(iv)	the Appellant's Notice of Motion (filed on 9 November 2011) seeking interim injunction did not rely upon the same jurisdictional basis as was relied upon in the Appellant's Notice of Motion (filed on 23 March 2011);

(v)	the Appellant's Notice of Motion (filed on 9 November 2011) was an interlocutory application seeking interim injunction, no substantive relief was sought;

(vi)	the evidence before the Learned Judge did not demonstrate or show that the Appellant had abused the processes of Court.

(b)	 The Learned Judge erred in law and in fact in refusing to grant orders sought in the Appellant's Notice of Motion (filed on 9 November 2011) and accepting the Respondent's application for the Notice of Motion to be dismissed for abuse of process for having a second bite at the cherry by failing to:

(i)	give due consideration of the Defendants' conduct in deliberately giving sworn evidence that was misleading and/or false;

(ii)	find that when His Honour Kariko J was determining the Appellant's Notice of Motion (filed on 23 March 2011) His Honour had before him evidence that was false and/or misleading;

(iii)	find that His Honour Kariko J's observation of the Appellant's Notice of Motion (filed on 23 March 2011) was made on evidence material that was false and/or misleading;

(iv)	find that the Appellant did not fail in its duty to give full and frank disclosure of relevant facts.

(c)	 The Learned Judge erred in law in refusing to grant the orders sought by the Appellant in its Notice of Motion (filed on 9 November 2011) when the Appellant had satisfied the requirements for the grant of interim injunction (sought in Notice of Motion)."

Submissions

7. We set out the submissions by the parties to be followed by discussion of the various grounds.

8. Counsel for the appellant made the following submissions. First, the appellants entered into Road Access Levy Agreements with landowners for the Amanab-Green Highway including the Kilifas area. Landowners from Suminini and Kilifas villages signed the agreement including Andrew Faku, Vincent Kime, Andrew Akivo, Noki Koip and Julias Meas. Some of these persons are respondents in this proceeding. Secondly, at law, there is no law or principle of law known as "having a second bite at the cherry." It is in fact an idiom. Thirdly, in its second application, the appellant was not seeking a review of the decision of His Honour Kariko J and did not seek an order to set aside the said decision. The second application was a fresh application. Fourthly, the second application was an interlocutory application seeking an interim relief not a permanent or substantive relief. In the second application the appellant made reference to a number of jurisdictional basis upon which the order for interim injunction was sought. Fifthly, there is no evidence that the appellant abused the process of the court. Sixthly, the first application was dismissed on a technicality, not on merits in that it made reference to wrong jurisdiction of the court to grant the interim relief. Seventhly, in the first application, the appellant did not place all material before the court and the respondents stated that there was no agreement to use the roads and they received no moneys from the appellant for its use of the roads. Finally, the material before the court in the second application demonstrated that the appellant had a serious question to be tried, that damages was not an adequate remedy, the appellant had given an undertaking as to damages and the balance of convenience favoured the grant of the injunction. 

9. Counsel for the respondents made the following submissions in response. First, the order sought in the second application is in the same terms as the substantive relief. The injunction sought is the same as the order sought in paragraph 4 of the Originating Summons. In other words, the appellant is seeking order in paragraph 4 of the Originating Summons pending the determination of the substantive matter. It is settled law that an interlocutory application cannot be used to obtain substantive relief. An interlocutory application facilitates substantive issues to be dealt with in due course. But it cannot be relied upon to secure substantive relief: National Capital District Commission vs. Yama Security Services Pty Ltd (2003) SC707; William Duma vs. Eric Meir (2007) SC898. Secondly, there is no serious question to be tried in the substantive proceeding. In the substantive proceeding, the appellant seeks to enforce an agreement against the respondents, who are not parties to the agreement. The Court cannot enforce an agreement against respondents who are not privy to the agreement. Thirdly, the appellant claims a licence over the area the subject of the dispute and does not dispute the right of the respondents as owners of the customary land. As landowners they have a superior title over the appellant, who is a licensee. Fourthly, the appellant has not demonstrated that damages will not be adequate remedy. If the appellant suffers any loss it would be monetary loss from the logging operations which can be easily quantified in terms of monetary loss. Finally, the Undertaking as to damages filed on 23rd March 2011 is not a valid undertaking as the alleged undertaking is signed by a David Ling allegedly in his capacity as General Manager and not as a Director or Company Secretary and that the seal of the company was affixed without proof of the authority of the Board of Directors of the company.

10. In the first application, the appellant relied on the Timber Permit and the Project Agreement to seek an injunction. The Timber Permit and the Project Agreement relate to Blocks 1, 2, 3 & 4. In the second application, the appellant relied on an agreement titled "Memorandum of Agreement regarding Road Access in Customary Lands in within Vanimo-Green Highway" (hereinafter "MOA") and two Timber Authorities (hereinafter "TA") to use roads and bridges in Blocks 5 & 6. The appellant claims that the respondents were part of the MOA and were bound by it. The respondents, who are owners of Blocks 5 & 6, deny that they were part of the MOA and never agreed for the roads to be constructed and/or used on their land. It is clear that the two applications deal substantially with the same issues between the same parties. 

Consideration of the grounds of appeal 

11. This is no doubt a discretionary judgment. The role of the Supreme Court in an appeal from the exercise of judicial discretion was discussed in the decision of Curtain Bros (PNG) Ltd vs. UPNG (2005) SC788. We reproduce the following passage from that decision:

"The appellant Court will not interfere with a discretionary judgment on a procedural matter within its jurisdiction, except where the exercise of that discretion is clearly wrong. A discretionary judgment may be set aside if an identifiable error occurred in the exercise of discretion. Alternatively, it may be set aside where there is no identifiable error, but the resulting judgment or order is 'unreasonable or plainly unjust' and such that an error can be inferred. These principles are well established. We adopt a passage from Kitto J in the Australian High Court case of Australia Coal and Shale Employees' Union vs. The Commonwealth (1956) 94 C.L.R. 621 at p.627, which was adopted by Clarkson J. in Breckwoldt & Co. (N.G.) Pty Ltd vs. Gnoyke [1974] PNGLR 106 at p.112 – 113:

'The decision by the primary judge to stay the action was made in exercise of a judicial discretion and I accept that in those circumstances the principles on which this Court should act are as described by Kitto J. in Australian Coal and Shale Employees' Union vs. The Commonwealth ... the true principle limiting the manner in which appellate jurisdiction is exercised in respect of decisions involving discretionary judgments is that there is a strong presumption in favour of the correctness of the decisions appealed from, and that that decision should therefore be affirmed unless the court of appeal is satisfied that it is clearly wrong. A degree of satisfaction to overcome the strength of the presumption may exist where there has been an error which consists in acting upon a wrong principle, or giving weight to extraneous or irrelevant matters, or failing to give weight or sufficient weight to relevant considerations, or making a mistake as to the facts. Again, the nature of the error may not be discoverable, but even so it is sufficient that the result is so unreasonable or plainly unjust that the appellate court may infer that there has been a failure properly to exercise the discretion which the law reposes in the court of first instance…"

12. This passage has been agreed with and adopted by this court in State vs. Sam Akoita & Ors (2009) SC977; Ron Napitalai vs. PNG Ports Corporation Ltd & Ors (2010) SC1016 and Isaac Lupari vs. Sir Michael Somare (2010) SC1071. The principles referred to are applicable here. 

Grounds (a) and (b) 

13. These two grounds are similar and will be dealt with together. The substantive claim by the appellant in the Originating Summons is for declaration of right based on the Timber Permit and the Project Agreement. That agreement was before Kariko J when His Honour found, on admission by the appellant, that the agreement does not apply to the respondents. The agreement was between the State (through the PNG Forest Authority), the appellant (as successor) and the landowners of Blocks 1, 2, 3 & 4 in the project area. The finding that there was no agreement between the appellant and respondents was based on clear evidence (see for instance Appeal Book, Vol. 1, pages 114 and 147).

14. Initially, the appellant relied on the Project Agreement and the Timber Permit in the application before Kariko J. After having failed, the appellant introduced the MOA signed in or about July 2009. This agreement was available at the time the first application was filed and heard. The appellant also relied on two Timber Authorities. The first TA was granted on 5th July 2004 and the second one was granted on 24th January 2007 (see Appeal Book, Vol. 2, pages 277 and 278). Again, these documents were available when the first application was filed and heard. 

15. David J also dismissed the second application. He took the view that the second application was an abuse of process as the evidence was available and ought to have been placed before Kariko J. He said the second application by the appellant was an attempt to have a "second bite at the cherry" as it was in essence trying to correct its earlier mistake, that there was no serious issue to be tried and that the balance of convenience did not favour the grant of the injunction.

16. We have perused the MOA and the two TAs and find that they are inconclusive. We are unable to find that they relate to or cover Blocks 5 and 6. 

17. Paragraph 2 (c) of the MOA states as follows:

"Following Vanimo-Green Highway, the following are the reference points for the road which is the subject of this Agreement:

(i)	 Passi River to Pual River ..................................TRP Block 6
(ii)	 Pual River to Bilia Creek....................................TRP Block 3
(iii)	 Bilia Creek to northeastern boundary of Amanab FMA Block 5 (southern boundary of TRP Block 2)
(iv)	Southern boundary of Amanab FMA Block 5 to the northern boundary of Amanab FMA Block 4." 

18. There is no map or other descriptions in the agreement to show the portion of land covered by the agreement. There is no map before the Court. 

19. The two TAs provide:

"This Authority authorises the holder to carry out forestry operations in the project area described, outlined in red on the map in Schedule 1 ("the Project Area") for the term specified in Schedule 2 subject to the Act and to the following terms and conditions..." 

20. The "holder" is the appellant. The map referred to in Schedule 1 is not attached to the document and is not before the Court. 

21. In his affidavit dated 27th October 2011, David Ling deposed that the appellant does not have a permit to conduct logging operations in Blocks 5 and 6. Amanab 56 has been granted a timber permit to conduct logging operations in Blocks 5 and 6. After the appellant was granted the TAs to clear forest and construct the segment of the Highway in Block 5, it sought written consent of Amanab 56 for it (appellant) to be allowed to use roads within Amanab Blocks 5 and 6. Amanab 56 accepted the appellant's request and formally (in writing) consented to the appellant to use the roads within Amanab Blocks 5 and 6 (see Appeal Book, Vol. 2, pages 258 to 259 and 279 to 282).

22. The appellant is relying on the purported consent given to it by Amanab 56 to use roads within Amanab Blocks 5 and 6. This clearly confirms the evidence of the respondents that there is no agreement between the landowners, the appellant and the State regarding Blocks 5 and 6. It cannot be any clearer. Amanab 56 is no substitute for the landowners and cannot agree and bind the landowners. 

Ground (c)

23. David J reached the conclusion that the conduct of the appellant amounts to abuse of process. Pursuant to Order 12 Rule 40(1) (c) of the National Court Rules the Court was entitled to dismiss the second application. 

24. Injunction is an equitable remedy. It is a matter for the discretion of the Court to refuse or grant the relief sought. In order for an injunction to be granted, the applicant must demonstrate to the Court that there is a serious case to be tried. The leading authority is a decision of the House of Lords in American Cyanide Company vs. Ethicon Limited (1975) 1 All ER 594. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Nuigini Pty Ltd vs. Allan Mott (1997) SC525 and Chief Collector of Taxes vs. Bougainville Copper Ltd (2007) SC853. The authorities also agree that once it has been determined that there is a serious question to be tried, if damages could adequately compensate the applicant, the injunction should not be granted: Golobadana No.35 Ltd vs. Bank of South Pacific Ltd (2002) N2309; Ewasse Landowners Association Incorporated vs. Hargy Oil Palms Limited (2005) N2878; Gobe Hongu Limited vs. The National Executive Council & Ors (1999) N1920. 

25. The grant of injunction is discretionary. Even if the applicant has satisfied all the requirements for grant of an injunction, the Court still retains the discretion not to grant the relief.

26. There is no agreement between the appellant and the landowners. There is no error in His Honour David J refusing to grant the injunction. In the circumstances, the appeal is dismissed with costs
__________________________________________________________
Bradshaw Lawyers: Lawyers for the Appellant 
Young & Williams Lawyers: Lawyers for the Respondents