Ewasse Land Owners Association Incorporated v Hargy Oil Palms Ltd [2005] PGLawRp 19; [2005] PNGLR 397 (24 August 2005)

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INJUNCTIONS – Interim injunction – Application for injunction to immediately restrain carrying on operations of oil palm milling and export – Relevant considerations to exercise of court's discretion –Equitable principles – Constitution, Section 155(4).

The plaintiff, a landowner group centred on a village located next to an oil palm mill and export facility, commenced proceedings aimed at shutting down the facility on environmental and public health grounds. The plaintiff sought an interim injunction, pending the hearing and determination of the substantive proceedings.

1. When dealing with applications for interim injunctions the court should consider three main issues. First, are there serious questions to be tried or does the plaintiff have an arguable case? Secondly, does the balance of convenience favour granting the injunction? Thirdly, is an injunction necessary to do justice in the circumstances of the case?

2. In the circumstances, none of the considerations favoured the granting of the injunction sought.

AGK Pacific (NG) Ltd v William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062.

Mauga Logging Company Pty Ltd v South Pacific Oil Palm Development Pty Ltd [1977] PNGLR 80.

Cannings j. This is an application by a landowner group, centred on a village that adjoins a major oil palm mill and exporting facility, for an interim injunction aimed at restraining the defendant, the owner and operator of the mill and export facility, from continuing its operations.

Hargy Oil Palms Limited, the defendant, has been operating oil palm plantations and a mill and export facility near Bialla in the West New Britain Province for 25 years. The defendant has a 99-year State lease over its land. Next to the main facility is a village called Ewasse. It is on customary land. The landowners have formed a corporation called the Ewasse Landowners Association Inc, which is the plaintiff in these proceedings.

The plaintiff claims that the defendant's operations have polluted and caused environmental damage to the land and the sea surrounding the mill over many years.

On 15 August 2005 the plaintiff filed an originating summons by which the following relief is sought:

a declaration that the defendant does not have an environmental plan issued under the Environment Act 2000 and that its discharge of waste material into the sea, at Ewasse, and into the surrounding areas, has been and continues to be unlawful;

an order that the defendant completely shuts down its operations until it satisfies the requirements of the Environment Act and the Water Resources Act;

an order that the defendant pays the costs of an independent expert to assess the loss of freshwater and marine resources of the Ewasse villagers;

an order that the defendant establishes a trust fund for rehabilitation of the waterfront of Ewasse village;

an order that the defendant pays for the costs of a medical expert to assess the extent of health problems of the Ewasse villagers attributable to the discharge of waste material;

On the same day, 15 August 2005, the plaintiff filed a notice of motion, seeking the following interim relief:

· an order that the defendant immediately shut down its operations for a period of seven days;

· an order that the matter be returnable at Kimbe on 22 August 2005, so the court could determine whether the shut-down should continue until the substantive hearing of the matter.

The day of filing of the originating summons and notice of motion, 15 August 2005, coincided with the first day of a weeklong National Court circuit I was conducting in Bialla. The documents were filed in Bialla and, upon being notified of that, I allowed the matter to be mentioned that day.

Mr V Narokobi appeared on behalf of the plaintiff and applied to have the matter heard there and then, ex parte, ie in the absence of the defendant. He said that the originating summons, notice of motion and supporting documents (an undertaking as to damages and an affidavit) had not yet been served on the defendant. However, it was an urgent application, as the villagers were being adversely affected by the pollution generated by the defendant's activities. If no one stood up against the defendant, the problem would continue. The country's environmental laws were being flagrantly breached, he submitted.

I refused the application as I was not satisfied that there existed proper grounds to hear an application of such a nature – which if granted would have far reaching implications for the defendant and its employees – without the necessary documents and notice being given to the defendant. I ordered that the documents be served immediately on the defendant's company secretary, Mr C Kaue, as he was present in court and willing to accept the documents on behalf of the company. I ordered that once that was done, it would constitute service on the defendant. I adjourned hearing of the motion to Kimbe on 22 August 2005.

On 16 August 2005 I inspected the site of the alleged environmental damage in the company of Mr V Narokobi and Mr C Kaue. The purpose of the site inspection was to familiarise myself with the village and the defendant's facility and the land and sea area that is the subject of the proceedings. I observed that the village is directly adjacent to the western boundary of the defendant's facility. There is a wire fence that marks the boundary. My attention was drawn to a number of geographical features referred to in the evidence, eg an area of dead mangroves that the plaintiff alleges has been polluted by the defendant; alleged discolouration of the sea water; the pipe out of which waste from the defendant's operations emerges onto the shoreline.

On 22 August 2005 the present motion was argued in Kimbe. Mr C Narokobi and Mr V Narokobi appeared for the plaintiff. Mr E Andersen appeared for the defendant. The motion is that the court grant an interim injunction closing down the defendant's operations, pending trial of the substantive case.

The plaintiff's motion is supported by two affidavits, the contents of which are summarised in the table below.

No	Deponent	Content
1	Vergil Los Narokobi, Lawyer, 15.08.05	States that he on 12.08.05 visited the site of the alleged environmental damage – observed accelerated erosion of the land, dying mangroves, warm, milky seawater, dying sea life on the beachfront, factory wastes spilling into the sea – he annexed a report by Simon Saulei and Simon Senart of the Biology Department of UPNG, headed "An Environmental Assessment of the Oil Palm Pollution on the Waterfront of the Ewasse Village and the Surrounding Areas, Bialla District, West New Britain Province" – he met Dr Saulei on 12.08.05, who confirmed that the report was his – the report is of an investigation of oil palm effluent pollution problems in the Ewasse area conducted in July 1996 – the report concludes that the pollution effect of the effluent discharges (solids, liquids and fumes) have greatly affected the immediate environments – recommends an immediate stop to the discharge of effluent into the sea and the nearby river and a range of other measures including those in the 'Environmental Code of Practice for the PNG Oil Palm Processing Industry'.
2	Vergil Los Narokobi, Lawyer, 18.08.05	States that he has been instructed that the plaintiff is a co-plaintiff in separate proceedings against the defendant in WS No 747 of 1995, by which various injunctions, declarations, damages and other relief were sought for nuisance, trespass, negligence and related causes of action arising from the defendant's operations – he has written to the lawyers with carriage of that matter to ascertain its status – believes it is still pending – is aware that a deed of release was executed but considers that it is only in relation to a limited part of the claim.

At the hearing of the motion the plaintiff sought to rely on six other affidavits, apparently sworn by Ewasse villagers and deposing to environmental concerns. Mr Andersen objected to use of those affidavits. I upheld the objection, as service in these circumstances was contrary to the National Court Rules and the plaintiff had ample time since the matter was raised in Bialla, to get its evidence in order.

The defendant's position is supported by three affidavits, the contents of which are summarised in the table below.

No	Deponent	Content
1	Erik Graham Andersen, Lawyer, 20.08.05	Deposes to a conversation with Mr V Narokobi on 19.08.05 about the present proceedings and the positions of the parties, the issues, the evidence, the timing of the hearing of the motion and related matters.
2	Cosmas Kaue, company secretary19.08.05	States that he is the defendant's company secretary – from 1980 to late 1993 POME was discharged directly into the ocean, but, that ceased on commissioning of a ponding system – there is a history of complaints from Ewasse villagers from 1980 to 1993 – some mangroves were damaged – defendant paid K120,000.00 without admitting liability and executed a deed of release on 5 April 1995 – since that time the defendant has not breached any duties under environmental laws – expresses opinion that if the plaintiff is granted the restraining orders it seeks, a number of persons will be affected, including the defendant, as the mill is an integral part of its operations; a substantial proportion of the defendants 2,500 employees, who would have to be laid off; 3,500 smallholder oil palm growers, who sell their produce to the Bialla mill; 50,000 people in West New Britain Province, who would be affected in some degree.
3	Paul Maliou, environmental manager,	States that he is the defendant's environmental manager – previously employed by DEC (1988-2000) and Gazelle Restoration Authority (2001-2002) – while an officer of the 20.08.05 DEC's Water Resources Division he attended the defendant's Bialla mill on various occasions to conduct investigations and compile reports, particularly re direct discharge of POME into waters near Ewasse – in 1993 the defendant commissioned a series of treatment ponds - the defendant's water use permits were renewed in 1996 – the defendant has a current environment permit (copy annexed to affidavit) No WD-L3(56), issued on 13.10.03, amended on 16.05.05, with an expiry date of 31.12.13, to carry out works within its oil palm plantations and to discharge wastes into the environment from its premises, subject to [10 pages of] terms and conditions – there has been negotiation with DEC over various issues since 2003 – quarterly effluent reports are lodged with DEC – DEC conducted is latest environmental inspection in April 2004 – no indication of unsatisfactory results – disagrees with the Saulei-Senart report annexed to V L Narokobi affidavit of 15.08.08 as the report is obsolete and outdated; it refers to unreliable results from a non-accredited laboratory; there is no evidence of its findings (eg accelerated erosion, discoloured seawater, dead marine life); treatment ponds are working effectively; POME is nutritious for aquatic life – the defendant is voluntarily going through a certification process with the International Standards Organisation re environmental compliance – final external audit is due in September 2005.

The plaintiff submits that there is a serious case to be tried regarding many breaches of the country's environmental laws. The defendant does not have an environmental plan under the Environment Act 2000. It does not have a licence under the Environmental Contaminants Act. It does not have a water use permit under the Water Resources Act. In the alternative, if it does have any of these plans, licences or permits, they have been breached. The Saulei-Senart report reveals major environmental pollution and degradation due to the defendant's operations, which is continuing and will continue to the detriment of the environment and the villagers unless stopped by the court. There is an arguable case that the environmental laws are being breached.

An injunction is necessary to prevent continuing contravention of the law and continuing environmental and social degradation. The defendant has been allowed to pollute the environment and disrupt the lives of the villagers for more than 20 years. Hence the urgency of the matter. If the plaintiff ultimately succeeds in the substantive proceedings, damages would not be an adequate remedy. It is not known how long it will take to rehabilitate the environment once the pollution and other environmental damage is stopped. It may take many years, perhaps 100. The court is authorised, and required, by the Constitution, Section 155(4), to make orders that are necessary to do justice in the circumstances of this case. The court must also act consistently with National Goal No 4, enshrined in the Constitution: for PNG's natural resources and environment to be conserved for the collective benefit of all, and replenished for the benefit of future generations. An injunction would put an immediate stop to the pollution and stop the fear that has been instilled into the villagers. Therefore, the balance of convenience favours the granting of the order sought.

The defendant asserts that there is a paucity of evidence in support of the plaintiff's motion. Part of the evidence is by a lawyer, Mr V Narokobi, who is unqualified to make environmental assessments. The other piece of evidence relied on, the Saulei-Senart report, is outdated, unreliable, not independent and of dubious quality. The evidence of the defendant's environment manager, Paul Maliou, shows that the defendant's operations are environmentally and legally compliant. The defendant is engaged in regular dialogue with the DEC and does have an environment permit, updated as recently as May 2005. The court should infer that the DEC has no major concerns about the defendant's operations. The plaintiff has little or no chance of obtaining the relief sought in its originating summons, which suffers from duplicity (in light of the earlier, continuing proceedings in WS No 747 of 1995); a lack of locus standi (ie the plaintiff lacks standing); and improper form (the case should have been commenced by writ of summons, rather than originating summons). Therefore, there is no arguable case.

Granting an injunction would disrupt the lives of thousands of people, as pointed out in Mr Kaue's affidavit. The balance of convenience favours the status quo, ie letting the defendant conduct its operations.

I emphasise that I am not dealing with the main or substantive proceedings that have been commenced by the plaintiff. I am dealing just with the motion or application for an interim injunction: to shut down the defendant's operations until the substantive proceedings are heard. The parties agree on the way in which the court should deal with the motion. The injunction is an equitable remedy. It is a matter for the discretion of the court. The plaintiff has no right to an injunction. Rather it must convince the court to exercise its discretion to grant the remedy.

A neat summary of the principles to apply when exercising this discretion was given by Injia J, as he then was, in AGK Pacific (NG) Ltd v William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062. His Honour stated:

The grant of injunctive relief, interim or permanent, mandatory or otherwise, is an equitable remedy and it is discretionary. The principles governing the Court's grant of interim injunctions are set out in various cases ... but I consider the principles of equity developed by the English equity Courts in various cases and restated by Kapi DCJ in Employer's Federation of PNG v. PNG Waterside Workers Union & Others N392 (1982) to be a comprehensive statement of the law. In essence, an applicant for interim injunction must satisfy two basic requirements:-

(2) that the balance of convenience favours the grant of interim injunction in order to preserve the status quo.

There are many relevant considerations to be taken into account and these are set out by Kapi DCJ in that case but the application of those principles will vary from case to case. In some category of cases, the seriousness of the issues to be tried and the strength of the plaintiff's case discerned from a preponderance of the evidence produced by the applicant and the defendant alone, without regard to the balance of convenience arguments or the question of damages, may militate in favour of the grant of an interim injunction.

I have also been persuaded by Mr V Narokobi's submission to consider the judgment of Frost CJ in Mauga Logging Company Pty Ltd v South Pacific Oil Palm Development Pty Ltd [1977] PNGLR 80. (Coincidentally, another case concerning developments in the Bialla District of West New Britain Province.) His Honour held that, if an application for an interim injunction did not meet the conventional 'tests' in common law or equity, which form part of the underlying law, recourse could be had to Section 155(4) of the Constitution, which states:

Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.

I will therefore determine the plaintiff's application for an interim injunction by asking three questions:

· Are there serious questions to be tried? Does the plaintiff have an arguable case?
· Does the balance of convenience favour granting the injunction?
· Is an injunction necessary to do justice in the circumstances of this case?

ARE THERE SERIOUS QUESTIONS TO BE TRIED? DOES THE PLAINTIFF HAVE AN ARGUABLE CASE?

The issue here is not simply whether the plaintiff has raised serious allegations. Obviously, it has. The plaintiff has alleged that the defendant – a foreign owned company occupying a prominent role in the economy of West New Britain Province – is operating illegally. It is alleged to be breaking the country's environmental laws, polluting the environment and putting the health and livelihood of the people of Ewasse at risk. No, that is not the test. The test is to ask: what chance does the plaintiff appear to have of succeeding in the substantive case?

This requires the court to identify with precision the cause of action that the plaintiff is relying on and then to consider the evidence that appears to be available in support of the elements of that cause of action. I asked Mr V Narokobi during the hearing of the motion what the cause of action was but I did not get a clear and precise answer. It seems that the cause of action is not common law-based. It is not a public nuisance or private nuisance action or a negligence action or a Rylands v Fletcher-style action. (In contrast, the proceedings in WS No 747 of 1995 appear to be common law-based and therefore it is easy to identify the cause of action.) Mr Narokobi, I think, was submitting that the action is based on breaches of a number of environmental statutes; and that it is the breach of those statues that will provide the basis of the cause of action. If that is the case, perhaps the action is based on the common law tort of breach of statutory duty. The point is that it is not readily apparent what the cause of action is. The court should not have to speculate about this. It should be readily apparent from the originating process, the supporting affidavits and the submissions made in support of the application for interim relief. The fact that I have had to think hard about it means that it is difficult for the plaintiff to show that he has a serious case to be tried.

Assuming for the moment, however, that the cause of action is clear and that this is a case about breach of statutory requirements, I see two further obstacles to the plaintiff's success.

First, the actual allegations of statutory breaches are vague and inadequately defined. If it is to be alleged that the defendant has breached the environmental laws, then it should be pleaded with particularity what the laws are; which provisions have been breached; and how they have been breached. To say that the Environment Act has been breached as the defendant does not have an environmental permit – or if it does have one, it has been breached – is not an adequate particularisation of the action that the plaintiff is trying to maintain.

Secondly, the evidence is weak. To say, in a submission, that a company does not have an environmental plan is not good enough. There should be evidence of that. Another aspect of the weakness of the evidence is regarding the actual claims about environmental pollution and degradation. The plaintiff is placing great store in the Saulei-Senart report. However, as I commented in the course of the hearing, it is seven years old. It is reporting on an investigation made two years before that. Its pedigree is untested. In addition, it appears not to be an 'official' report, in the sense of being prepared by an independent agency. At first glance the evidence presented by the defendant has been more impressive. This is not the substantive hearing and the court is not here, at this stage, to make findings of fact. It must inevitably, in an application of this sort, work on impressions gained from a fairly cursory examination of the available evidence. But the evidence presented in Mr Maliou's affidavit gives the impression that the defendant is environmentally compliant; it does have an environmental permit; it is in regular contact with the DEC; no major concerns have been expressed by the DEC.

So I conclude that at this stage, based on the material presently available to the court, the plaintiff does not have a serious case to be tried and has not shown a strong, arguable case. Or putting it in less pejorative terms: there may well be a good case, but it needs some work done on it. It needs to be better constructed.

It has always struck me that that is a rather curious form of words, meaningful probably only to lawyers. So I will try and put that time-honoured phrase into plain English. What is the best thing to do on an interim basis taking into account the conflicting interests? Where do the interests of justice lie? What will happen if an injunction is not granted? What will happen if an injunction is granted? Who will suffer the greatest inconvenience?

There is no evidence that the villagers are at imminent risk of serious risk or disease. They clearly have a grievance. However, if the injunction were granted this would create great inconvenience. Workers would be laid off; oil palm growers would be unable to sell their produce; the local economy would suffer a serious setback. Mr Kaue quotes some big figures in his affidavit. They sound realistic. The court must also be conscious of the message an injunction would send to the wider business, agricultural and industrial communities in the country. It would, I suggest, send a shiver down their spines to realise that the National Court could, on quite limited material, order the immediate shutdown of a prominent agro-industrial export operation.

The court should not, of course, shirk its responsibilities and fail to make such orders as are necessary. If there were clear evidence of dangerous environmental pollution or that the health of the villagers was in peril, the court would be entitled, indeed obliged, to grant an injunction. But I have not seen that evidence. It has not been put before the court. When I inspected the site last week I did not see clear and manifest evidence of environmental degradation.

So, the balance of convenience lies in letting the defendant continue its operations, at least until the sort of evidence required, to shut it down, is presented to the court.

The court should never lose sight of its duty to do justice. Although I have referred in this judgment to some rather technical legal principles, at the heart of my consideration of this application is the overriding duty of the court to do justice and to balance the conflicting interests of the parties, and also everybody who would be affected by the court's orders.

Justice is often in the eyes of the beholder. If I granted the injunction sought and ordered the defendant to close down, that may well be seen as a great victory by the people of Ewasse. However, how would the workers in the oil palm mill feel if they are laid off work? Would it be justice, in their eyes? And the smallholders around Bialla, what would their reaction be? I am inclined to the view that if I granted the injunction, based on the material now before the court, I would be doing an injustice to many thousands of individuals.

None of the three considerations I have identified favours the granting of an injunction. The plaintiff's motion will be refused.

This does not mean that the plaintiff's case is struck out. It might be that the plaintiff has a good case. Given more time, the villagers of Ewasse may be able to get their case better prepared; get better evidence; clearly spell out how they believe the defendant is breaking the law. The court is not closing its doors to their grievances, which appear genuine.

The order of the court is that the plaintiff's application, sought by the notice of motion filed on 15 August 2005, at Bialla, and amended and clarified at the hearing on 22 August 2005, at Kimbe, for an interim injunction to close down the defendant's operations, pending trial of the substantive proceedings, is refused.

Lawyers for the plaintiff: Narokobi Lawyers .
Lawyers for the defendants: Gadens Lawyers.

Papua New Guinea Law Reports

Ewasse Land Owners Association Incorporated v Hargy Oil Palms Ltd [2005] PGLawRp 19; [2005] PNGLR 397 (24 August 2005)