Lae City Authority v LM Gini Ltd [2021] PGDC 65; DC6020 (3 June 2021)

DC6020

PAPUA NEW GUINEA

[IN THE DISTRICT COURT OF JUSTICE

SITTING IN ITS CIVIL JURISDICTION]

CV 74 of 2021
BETWEEN

LAE CITY AUTHORITY
Complainant

AND

LM GINI LTD
Defendant

Lae: L Wawun Kuvi

2021: 16 April, 27 May & 3 June
 

PRACTICE AND PROCEDURE-ORGINATING PROCESS- JURISDICTION- Source of power indicates matter is Criminal-Whether the matter should have been filed by way of Complaint?

PRACTICE AND PROCEDURE-PROCEDURE – applicant applying ex parte – applicant must formally apply to dispense with service – Court must make orders to dispense with service before proceeding ex parte.

PRACTICE AND PROCEDURE-INJUCTION – Interim Order obtained Exparte -Applicant applying without service of originating process-Whether the District Court has powers to hear interim matters without service of complaint and summons on complaint?

Cases Cited
Lae City Authority v FTM Holdings [2021] PGDC 49; DC 6006 (15 May 2021)
Sevese v Cutmore [2020] PGDC 21; DC4077 (8 October 2020)
Henry v Arua [2020] PGDC 3; DC4048 (28 May 2020)
Bemobile Ltd v Digicel (PNG) Ltd [2013] PGNC 22; N5064 (9 February 2013)
Kamit v Aus-PNG Research & Resources Impex Ltd [2007] PGNC 4: N3112
Aviat Social & Sporting Club (Lae) Inc v Anthony Meehan Ltd [2001] PGNC 118; N2071 (8 March 2001)
The State v Esorom Burege (No 1) [1992] PNGLR 481
Buka v Lenny [1978] P.N.G.L.R 510

Overseas Cases
Higgins v Mr Comans, Acting Magistrate & DPP (Qld) [2005] 53 A Crim R 565
Grassby v The Queen [1989] HCA 45; (1989) 168 CLR 1 at 17

Legislation
District Court Act

Rules of Court
National Court Motions (Amendment) Rules 2005

Counsel

Ms Natasha David for the Complainant

No appearance of Defendant

3 June 2021

L Wawun-Kuvi, Magistrate:

1. This is yet another case filed by Lae City Authority that contains serious legal and procedural defects.
2. The background of this case is as follows:
   • On 16 April 2021, the Complainant filed a Complaint, Summons on Complaint, Affidavit in Support, Notice of Motion and Undertaking as to Damages.
   • On the same day, Ms Nathsa David of David and David Company Lawyers wrote a letter to the Clerk of Court requesting urgent hearing of the matter citing urgent municipal issues pertaining to the Trading Act 1949.
   • There was no service of the Complaint, Summons on Complaint and the Affidavit in Support. The matter was heard ex parte on the same afternoon.
   • Orders were issued as follows:
     • Leave is granted to the Complainant to dispense with requirements for service.
     • In the interim, the Defendant by itself, employees/servants and agents or associates howsoever are restrained from conducting any form of business activity until such time the Defendant applies to the Complainant for its Trading Licence.
     • Costs to be in the cause.
     • The matter is adjourned to 27 May 2021 at 9.30am for the Defendant to comply with term (1) of the Order therein.
   • On 27 May 2021, the matter was listed before me. There was no appearance by both parties. There is no affidavit of service. I adjourned the matter to 3 June 2021.
   • Today, there is still no appearance from both parties and there is still no affidavit of service.

Procedural Errors

3. As I had stated in the case of Lae City Authority v FTM Holdings [2021]^[1] the Complainant has to specific in the complaint the source of the Court’s power.
4. Here again the Complainant refers to the Trading Act 1949. As I had discussed in Lae City Authority v FTM Holdings [2021] (supra), the breach of the Act is a criminal offence.
5. The use of a complaint to commence prosecution is procedurally wrong.
6. This matter should have been commenced by information to be determined summarily as a simple offence.
7. Furthermore, the Trading Act does not specific who is responsible for prosecuting breaches. It only refers to the District Officer as the person who grants licences. As discussed in Lae City Authority v FTM Holdings [2021], that power is vested in the Provincial Government.
8. Also, the Lae City Authority Act 2015 does not confer powers of prosecution. As such David and David Company Lawyers cannot prosecute matters on behalf of Lae City Authority.^[2]

OTHER ISSUES
Obtaining Ex parte Orders without service of Complainant and Summons

9. As I had stated in Lae City Authority v FTM Holdings [2021], there is no provision within the District Court Act which provides for Ex parte hearings when the Complaint and Summons on Complaint has not been served. The District Court Act requires that the defendant is served before a matter proceeds ex parte, see ss 42(2) and 143 of the District Court Act.
10. There are also no express provisions which provide for Interim injunctions. However, in my decision in Henry v Arua [2020]^[3] I referred to the Australian cases of Higgins v Comans^[4] and Grassby v The Queen^[5]. These cases discuss the implied powers of the Magistrate’s court and found that, the implied powers of a Magistrate’s Court existed only from express provisions that give jurisdiction and where they become necessary to enable a Magistrate to effectively carry out his or her statutory function. It is not all encompassing.
11. In Higgins v Comans (supra) on the issue of whether the committal court had the power to stay, it was held that the Committal Court did not. The Magistrate’s only function is to determine whether the evidence as presented was sufficient or not sufficient.
12. The reason I highlighted the above cases is to demonstrate that whilst there are no express provisions, interim injunctions are necessary to maintain status quo in civil cases. Therefore in my view, there exists implied powers. These implied powers are further supported by reference to section 22 of the District Court Act.
13. However, my view is that section 22 cannot bypass this requirement of service of the originating process because unlike the National Court, District Courts are created by statue and must exercise powers that are within law. Section 22 is applied only after the complaint and summons is served on the defendant. It is then a party can seek to make an application for an interim injunction.

What then would be the appropriate process for the issuance of an ex parte interim injunction?

14. The relevant process in the National Court is found in National Court Motions (Amendment) Rules 2005. Rule 5 is what confers the National Court powers to determine ex parte interim applications.
    15. The relevant process in terms of this matter, where the originating process was filed is set out under Rule 5(ii). The process is:
        • The Applicant must write a letter stating (1) the urgency and (2) why the requirements of service ought to be dispensed.
        • Upon the registry being satisfied the motion is then listed for determination.
        • The matter should not be listed if the Applicant has not filed the Originating Process, Notice of Motion, Supporting Affidavits, where appropriate an Undertaking as to Damages and the Draft Order.
        • The Applicant must in the motion first apply with dispensing of service. The Applicant must also demonstrate in the supporting affidavit, the urgency of the matter and the reasons why service should be dispensed, which may include the difficulty in locating the defendant.
        • The Order granted must not grant substantive relief sought in the originating process contrary to rule 5(ii)(f) of the Motions Rules.

Are there any issues in relation to the procedure adopted in the present case?

16. Yes.
17. The letter to the registry did not explain the urgency of the matter other than merely stating “municipal issues”. This is my view was not sufficient to comply with the Motions Rules.
18. The letter also did not state the reason why service should have been dispensed.
19. The Affidavit by Robin Calistus in support of the Complaint and Motion did not state the urgency of the matter and the reasons why service should be dispensed in compliance with the Rules.
20. There was no separate application for dispensing of service and it was granted merely because it was in the draft orders. In Bemobile Ltd v Digicel (PNG) Ltd [2013], Davani J stated that the interim orders can be set aside for failure to formally apply for an order to dispense with service.
21. The Complainant should have filed a separate affidavit in support of the motion. When the complainant relied on the substantive affidavit, this resulted in the Court granting substantive relief contrary to rule 5(ii)(f) of the Motions Rules.
22. As stated by then Kandakasi J in the case of Aviat Social & Sporting Club (Lae) Inc v Anthony Meehan Ltd^[6] when he said:

“a number of cases have now made it very clear that, District Courts are creatures of statute. Their powers and functions are thus defined by their enabling legislation, the District Courts Act. This means the provisions under that Act has to be followed for a valid exercise of power. A failure to confirm with what is provided for in the Act renders any decision arrived at or any step taken before a District Court null and void and of no effect.^[7]

23. Other than this case being a criminal matter, the Interim Order obtained on 16 April 2021 is void and has no effect for all the foregoing reasons.

Did the Application meet the requirements for an interim order to be granted?

24. As can be seen from the Order, the Complainant is seeking an injunction, preventing the Defendant was conducting business until it obtains a licence.
25. The principles in granting an interim injunction are set out in Bemobile Ltd v Digicel (PNG) Ltd [2013]^[8]. The relevant considerations that should have been applied to determine whether there should have been a grant of an injunction are:
    1. Is there action not frivolous or vexatious?
    2. Is there a serious question to be tried?
    3. Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial?
26. The Complaint relied on the Trading Act as the source of power. As stated above the breach of the Trading Act is a criminal offence. That should have been the first indication that the matter was not properly before the Court. Also, the Trading Act does not confer powers on Lae City Authority and in addition the Lae City Authority Act 2015 does not confer licencing powers. More importantly, the Trading Act and the Lae City Authority Act do not have express provisions that empower the District Court to grant the relief sought.
27. All of this would have indicated that the District Court had no powers to act and therefore there was no serious question to be tried and that there was no real prospect for a claim for an injunction at trial.

Form of the Order

28. The form of the Order was confusing and inconsistent with set procedure and law.
29. The Order was:

“1. In the interim, the Defendant by itself, employees/servants and agents or associates howsoever are restrained from conducting any form of business activity until such time the Defendant applies to the Complainant for its Trading Licence....

3. The matter is adjourned to 27 May 2021 at 9.30am for the Defendant to comply with term (1) of the Order therein.”

30. Other than a breach in natural justice, as stated above, the Court in effect granted substantive relief.
31. Furthermore as stated by Davani, J in Bemobile Ltd v Digicel (PNG) Ltd [2013], the matter should have been made returnable for interparty hearing, for the Court to consider the merits of the injunction.
32. The Order can be set aside on this basis as well
33. Finally, there is no source of power within either the Trading Act or Lae City Authority Act that permits the District Court to restrain a business from conducting business until it obtains a licence.
34. We do not have reinvented the law. It is clear that if a person does not have a licence, they are arrested and charged.

Recommendations

35. Having considered the previous case and this present matter, I suggest that the Lae City Authority should:
    1. Enter into a Memorandum with the Police and create a reserve unit similar to the National Capital District Commission to enforce with municipal laws.
    2. Create an investigation unit to investigate and compile files for breaches.
    3. Amend its law to include arrest and prosecution powers like the Customs, Immigration Laws, Fisheries and Banking Laws.
    4. Amend its laws or create municipal laws that grant it specific powers for the various municipal breaches.

Conclusion

36. This case, as in Lae City Authority v FTM Holdings [2021] contains serious legal and procedural errors. Such errors cost businesses money and counsels having carriage must be vigilant to ensure that parties are not unnecessarily dragged to Court or their clients are not ill advised where they may then be subjected to legal fees.

Orders

37. The Orders of the Court is as follows:
    1. The Ex parte Interim Order of 16 April 2021 is set aside.
    2. Compliant dismissed for abuse of process and want of jurisdiction.

Lawyer for the Complainant David and David Co Lawyers

Lawyer for the Defendant Nil

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^[1] [2021] PGDC 48; DC6006 (15 May 2021)
^[2] See Sevese v Cutmore [2020] PGDC 21; DC4077 (8 October 2020); Kamit v Aus-PNG Research & Resources Impex Ltd [2007] PGNC 4: N3112; The State v Esorom Burege (No 1) [1992] PNGLR 481 and
Buka v Lenny [1978] PNGLR 510
^[3] [2020] PGDC 3; DC4048 (28 May 2020)
^[4] Per Keane, JA in Higgins v Mr Comans, Acting Magistrate & DPP (Qld) (2005) 153 A Crim R 565
^[5] Grassby v The Queen [1989] HCA 45; (1989) 168 CLR 1 at 17
^[6] [2001] PGNC 118; N2071 (8 March 2001)
^[7] See The Senior Stipendiary Magistrate, Ex parte The Acting Public Prosecutor [1976] PNGLR 344 at 349; Kiau Nekints v. Moki Rumints [1990] PNGLR 123 and ABCO Transport Pty Ltd v. Timothy Sakaip (unreported but numbered judgement of Injia, J) N1577; William Moses v. Otto Benal Magiten (01/12/00) N2023 and Rabaul Shipping Limited v. Rita Ruru (08/12/00) N2022; Wama v Palme [2012] PGNC 85; N4714 (22 May 2012). See also Chapter 2.2 of the Magistrates Manual
^[8]