Molu v Pena [2009] PGNC 201; N3817 (21 December 2009)

N3817

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS NO 832 OF 2008

BETWEEN

PASTOR JAMES MOLU
Plaintiff

AND

DOKTA PENA
Defendant

Mount Hagen: Makail, J
2009: 17th & 21st December

INJUNCTIONS - Ex-parte interim injunction - Equitable relief - Application to set aside - Impounding of PMV bus - No issue as to ownership - Claim for recovery of cost of repairs - No serious issues - Inconvenient to impound PMV bus - Damages adequate remedy - Constitution - Schedule 2.2 - National Court Rules - Order 12, rule 8.

PRACTICE & PROCEDURE - Undertaking as to damages - Enforcement of - Discretionary - Principles of.

Cases cited:

Papua New Guinean cases

Peter Pagi -v- Wilfred Mindili (2009) N3753
White Corner Investments Limited -v- Regina Waim Haro (2006) N3089
East Arowe Timbers Resources Limited & Ors -v- Cakara Alam (PNG) Ltd & Ors (2008) N3270
Wei Xiang Cheng & Anor -v- Agmark Pacific Limited & Anor (2008) N3338

Overseas cases

Cheltenham Gloucester Building Society -v- Ricketts & Ors [1993] 1 WLR 1545

Counsel:

Mr K Peri, for Plaintiff
Mr D Gonol, for Defendant

21st December, 2009

INTERLOCUTORY RULING

1. MAKAIL, J: The defendant applies pursuant to an amended notice of motion filed on 4th December 2009 to first, set aside an ex-parte interim injunction of 10th October 2008, secondly, the return of a motor vehicle described as a Toyota Hiace bus, bearing registration no, P-708R ("bus"), presently held at Mt Hagen police station and finally, enforcement of the plaintiffs undertaking as to damages filed on 08th September 2008 against the plaintiff. The defendant invokes the Court’s power under Order 12, rule 8 of the National Court Rules.

2. In support of the application, the defendant relies on his affidavit sworn in 6th July 2009 and filed on 7th July 2009 and also the affidavit of his lawyer, Mr Danny Gonol sworn on 18th November 2009 and filed on 4th December 2009. The plaintiff relies on his affidavit sworn and filed on 8th September 2008.

3. The brief facts of the case are these: the defendant is from Gia village in Tambul District of the Western Highlands Province and is a community health worker and has been living and working in Birop village, Upper Mendi of the Southern Highlands Province since the early 80’s. In 2003, he brought his bus to Mt Hagen and registered it as a public motor vehicle ("PMV") to carry passengers and make money. It was used in Mt Hagen and travels occasionally to Mendi. Sometimes in 2006, it had a mechanical problem and he brought it to one of his brothers who lived in Walum village in the Imbongu District of the Southern Highlands Province to keep. He returned to Mendi.

4. Unknown to him, his brother sold it to a man from Walum village by the name of Tom Richard for K5,000.00. When he found out about this, he came to Mt Hagen and lodged a complaint with the Mt Hagen police. Acting on the complaint, the police located the bus but it was in the possession of the plaintiff. They recovered it and also arrested him. The plaintiff was charged for being in possession of the bus suspected of being stolen pursuant to section 16 of the Summary Offences Act. The charge was heard before the Mt Hagen District Court and was dismissed on 20th June 2008. The District Court also ordered the return of the bus to the defendant as Tom Richard did not have good title to sell it to the plaintiff. Based on the decision of the District Court, the defendant took possession of it and took it to his village in Tambul and left it there.

5. In October 2008, acting on the ex-parte interim injunction of the National Court, the police removed the bus from his village and impounded it at Mt Hagen police station. When he found out, he returned to Mt Hagen and went to the police station where he was told that the bus was impounded pursuant to a National Court order. Upon inspection of the bus, he noticed some of the parts were removed. He requested the lawyers for the plaintiff to serve copies of the notice of motion and supporting affidavits on him but received no response. He attended at the Mt Hagen National Court registry and made copies of the Court documents and then engaged Paulus Dowa Lawyers to act for him.

6. The plaintiff, on the other hand claims that he did serve the writ of summons served on the defendant through one Pea Rami on 14th August 2008 at Mendi town. Hence, the defendant should have been aware of the proceeding and should have defended it. The reason for commencing the proceeding against the defendant is this; the bus broke down and was left at a workshop in Mt Hagen for 1 year. Its engine had ceased working. The owner of the bus wanted to sell it for K5,000.00. As he was interested in the body of the bus, he purchased it and replaced its dead engine with a new one at a cost of K3,500.00. He spent a total of K15,103.80 to get it back on the road. It is unfair that after all the hard work, time and money put into repairing the bus, the defendant has come later and removed it from him. The bus should be locked up at the police station for safety reasons.

7. Having heard submissions of counsel for the parties, I consider it not necessary to repeat them here and will move on straight to determining whether the principles applicable in setting aside of ex-parte interim injunctions have been satisfied by the defendant for the application to succeed. The principles of setting aside of ex-parte interim injunctions, are well settled in this jurisdiction, hence need no elaboration suffice to state that, an applicant must establish that:

1. there are no serious issues raised in the proceeding which would require a full trial to properly determine the issues;

2. balance of convenience does not favour the continuation of the ex-parte interim injunction;

3. damages would be an adequate remedy;

4. the application to set aside is made promptly and

5. applicant is not guilty of inequity.

8. The Courts have applied these principles as part of the underlying law by virtue of adoption and application of the principles of common law and equity under schedule 2.2 of the Constitution: see my brief discussions on this subject in Peter Pagi -v- Wilfred Mindili (2009) N3753. Hence, with these principles and the submissions of parties in mind, I apply them to the facts of this case and I find that:

- There are no serious issues raised in this proceeding. This is because the plaintiff does not dispute that the defendant is the owner of the bus as it is clear from the pleadings in the statement of claim endorsed to the writ of summons that the only relief he seeks against the defendant is K15,103.18 as cost of repairs. I so find despite the plaintiffs submission that, ownership is in issue as the documents for registration and insurance certificate of the bus marked as annexure "A" to the affidavit of the defendant on 6th July 2009 and filed on 7th July 2009, show that the registration and insurance of the bus in the name of the defendant had expired on 5th February 2004. In the absence of a current registration and insurance certificate in the name of the defendant, it is incorrect for the defendant to assert that he is the owner of the bus.

- With respect, I reject this proposition for the simple reason that, this submission has no foundation in the pleadings of the statement of claim, in that, the plaintiff takes no issue with the ownership of the bus. His only complaint is the cost thrown away in repairing the bus. That being the case, there is no basis, legal or otherwise, for the plaintiff to "lock up" the bus.

- The balance of convenience does not favour the continuation of the ex-parte interim injunction because the defendant has been deprived of the use of the bus, and in my view, it does not matter if the bus has been used for business purposes, eg, PMV business operations or for personal reasons. What is of relevance and importance is that, the defendant has been deprived of its use, therefore, it must be returned to him immediately.

- Further, based on the evidence of the defendant at paragraph 19 of his affidavit sworn on 6th July 2009 and filed on 7th July 2009 which has not been denied or refuted by the plaintiff, parts of the bus have been removed whilst being held at Mt Hagen police station. At the same time, it is undergoing wear and tear due to exposure to the sun in the open air and also lack of maintenance. In my view, if the ex-parte interim injunction is allowed to continue, more damage would be done than good.

- Damages is an alternative remedy for the plaintiff as it is clear from the statement of claim that he seeks K15,103.18 against the defendant. As he has commenced proceeding against the defendant to recover this amount of money, the proceeding must take its usual course and if he is successful at the end, there shall be a judgment for that amount in his favour. If the defendant fails to satisfy the judgment, there are other recourses available to him in terms of enforcement of the judgment against the defendant is concern, but not locking up the bus at this point in time.

- The application has not been made promptly. This is because, the ex-parte interim injunction was obtained on 10th October 2008 and the application was initially filed on 7th July 2009 and subsequently amended on 4th December 2009. This is a delay of 9 months. But I accept that the defendant has given a reasonable explanation for the delay. First, although the plaintiff served the writ of summons on him through one Pea Rami on 14th August 2008 at Mendi town, there is no evidence of service of the notice of motion for this application on the defendant before or after it was moved by the plaintiff on 10th October 2008.

- Secondly, lack of evidence of service of the notice of motion for this application on the defendant confirms the defendant’s claim that the plaintiff did not serve the notice of motion on him. The defendant became aware of the existence of the ex-parte interim injunction on 10th October 2008 after it was obtained by the plaintiff and executed by the police when they went to his village at Tambul and removed the bus. Hence, he is excused for bringing the application this late.

- The plaintiff has not come to Court with "clean hands" according to two Latin maxims, "He who seeks equity must do equity" and "He who seeks equity, must come with clean hands". There is no evidence that he conducted an independent search at the Motor Vehicle Traffic registry to verify if Tom Richard had good title to sell the bus to him. It appears to me that he acted on the representation of Tom Richard and bought the bus when it was at the workshop.

- It is no wonder when he was charged by the police for being in possession of a motor vehicle suspected of been stolen, the District Court on 20th June 2008 found that the person who sold the bus to him had no good title and dismissed the charge against him and further ordered that the bus be returned to the defendant. Despite the District Court order of 20th June 2008, he went ahead and obtained the ex-parte interim injunction and had the bus impounded by the police when there was no proper basis, in that, there was no issue over the ownership of the bus except the claim for cost of repairs. To my mind, he has not come to Court with "clean hands" and this Court exercising its equitable jurisdiction under schedule 2.2 of the Constitution will not do equity if it allows the ex-parte interim injunction to continue.

9. For these reasons, I am satisfied that there is no proper basis for the bus to be "locked up" at Mt. Hagen police station based on the ex-parte interim injunction and it ought to be set aside. I now turn to the application to enforce the undertaking as to damages against the plaintiff.

10. In order to enforce an undertaking as to damages, it has been held that, ".......The undertaking though described as an undertaking as to damages does not found any cause of action. It does, however, enable the party enjoined to apply to the court for compensation if it is subsequently established that the interlocutory injunction should not have been granted." see Cheltenham Gloucester Building Society -v- Ricketts & Ors [1993] 1 WLR 1545 at 1551, per Neil, LJ.

11. In White Corner Investments Limited -v- Regina Waim Haro (2006) N3089, Gabi, J after considering the case of Cheltanham (supra) and many others in relation to enforcement of undertaking as to damages said, "An undertaking as to damages is given to the Court, not to the other party to the proceedings. As such there is no contract between the parties and no right is conferred on a party to the proceedings to sue. However, it enables the other party to apply for compensation for loss suffered as a result of the injunction." See also East Arowe Timbers Resources Limited & Ors -v- Cakara Alam (PNG) Ltd & Ors (2008) N3270.

12. In the light of the above cases, it is clear that enforcement of an undertaking as to damages is not a right, conferred on a party to a proceeding to sue the party giving the undertaking as of right but is conferred at the discretion of the Court. As to how the party may apply for compensation for loss suffered as a result of an injunction is done in this way, and I am grateful to Gavara Nanu, J for his succinct exposition of the considerations by which the Court may take into account in an application to enforce undertaking as to damages in Wei Xiang Cheng & Anor -v- Agmark Pacific Limited (2008) N3338, a case which apparently, I was counsel. His Honour listed them as follows:

1. The application must be supported by evidence, either by affidavit or orally substantiating the damages;

2. Whether the substantive action has been concluded, and if concluded whether by a decision of the Court;

3. Whether there is an appeal pending against the decision of the Court;

4. Whether there has been delay by the applicant to make the application to enforce the undertaking;

5. Whether the injunction was obtained in the interest of the public to maintain the status quo pending the determination of the rights of the parties; and

6. Whether the conduct of the party applying to enforce the undertaking would make the enforcement inequitable to do so.

13. I adopt these considerations and apply them to the present application. First, there is some evidence, but not very detail of the defendant’s losses at paragraph 19 of his affidavit sworn on 6th July 2009 and filed on 7th July 2009. Secondly, the substantive action has yet to be concluded. As noted above, the plaintiff seeks damages for cost of repairs against the defendant. This is the substantive issue which has yet to be determined by the Court. Thirdly, as the substantive action has yet to be determined, there is no decision of the National Court for which an appeal may lie and pending in the Supreme Court.

14. Fourthly, whilst there has been a delay of 9 months in bringing this application, I have already found that the defendant has offered a reasonable explanation, and that is, he was not served with the notice of motion for this application until after the ex-parte interim injunction was obtained by the Plaintiff on 10th October 2008 and police executed it by removing the bus from his village at Tambul. Then, there is the failure by the plaintiff and his lawyers to provide the notice of motion and supporting affidavits despite his numerous requests which resulted in him making copies of the Court documents from the Court file at Mt Hagen National Court registry. Then, he had to engage the services of Paulus Dowa Lawyers which led to the filing of the initial application on 7th July 2009 and subsequently amended on 4th December 2009.

15. Fifthly, there is no public interest involved in this case because the dispute over the bus leading to the claim for cost of repairs is indeed a private one between the plaintiff and the defendant. Finally, as I have found above, it would be inequitable if the ex-parte interim injunction is allowed to remain as it would do more harm to the defendant than good. It follows; the enforcement of the undertaking would not be inequitable to do so.

16. Weighting up all these considerations, I am inclined to grant this application notwithstanding that the substantive action in relation to the cost of repairs has not been concluded because it would be convenient and less time consuming for both sides’ claims to be tried together at the trial and one decision made to settle the dispute once and for all. Accordingly, I grant the application to enforce the undertaking as to damages against the plaintiff.

The orders of the Court therefore, are:

1. The ex-parte interim injunction of 10th October 2008 be set aside forthwith.

2. The motor vehicle, Toyota Hiace bus, bearing registration number P 708R locked up at Mt Hagen police station be released to the defendant forthwith.

3. The plaintiff is liable to pay damages to the defendant which shall be assessed at the full trial pursuant to the undertaking as to damages filed on 8th September 2008.

4. The plaintiff shall pay the defendant’s costs of the application.

5. Time for entry of these orders shall be abridged to the date of settlement by the Registrar which shall take place forthwith.

Ruling and orders accordingly.

_________________________________________

Warner Shand Lawyers: Lawyers for the Plaintiff
Paulus Dowa Lawyers: Lawyers for the Defendant