Gogl Naru Resource Owners Association Incorporated v Jant Ltd [2011] PGNC 193; N4472 (19 December 2011)

N4472

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO 891 OF 2011

GOGL NARU RESOURCE OWNERS
ASSOCIATION INCORPORATED
Plaintiff

V

JANT LIMITED
Defendant

Madang: Cannings J
2011: 16, 19 December

INJUNCTIONS – interim injunctions – application for interim injunction to restrain timber company from conducting timber operations.

The defendant's timber permit and project agreement expired. The plaintiff, an incorporated landowner association which claimed to represent customary landowners of the land covered by the permit and agreement, commenced proceedings against the defendant, seeking declarations as to the effect of expiry of the permit and the agreement and a permanent injunction restraining the defendant from conducting any further timber operations. Having commenced those proceedings the plaintiff applied by motion for an interim injunction restraining the defendant from conducting any timber operations and removing any of its property from the land, until further order of the court.

Held:

(1) The primary considerations to be taken into account when the court decides how to exercise its discretion whether to grant an interim injunction are: (a) are there serious questions to be tried and does an arguable case exist? (b) has an adequate undertaking as to damages been given? (c) would damages be an inadequate remedy if the interim order is not granted? (d) does the balance of convenience favour the granting of the interim order? (e) do the interests of justice require that the interim order be made?

(2) If all considerations are in the affirmative it will generally be the case that an interim injunction should be granted. Failure to satisfy one or more of the criteria will work in favour of refusing the injunction.

(3) Here: (a) the court was not satisfied that there are serious questions to be tried and that the plaintiff has standing to seek the relief being sought and that it has a serious, not merely speculative, case; (b) an undertaking as to damages has been given only by the chairman of the plaintiff and is not endorsed by a corporate seal; (c) damages would not be an inadequate remedy; (d) the balance of convenience does not favour granting an injunction as there is a statutory authority, the Forest Authority, which is well apprised of the expiry of the permit and the agreement and is in the best position to manage the implications of their expiry and any landowner issues that may arise; and (e) the interests of justice do not require that the injunction be granted, given the absence of prima facie evidence that the defendant is guilty of unlawful or improper conduct.

(4) As none of the considerations favour its granting, an interim injunction was refused and costs awarded to the defendant.

Cases cited

The following cases are cited in the judgment:

B Fortunaso Ltd v Bank of South Pacific Ltd [1992] PNGLR 275
Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853
Ewasse Landowners Association Inc v Hargy Oil Palms Ltd (2005) N2878
Fulleborn Plantations Ltd v Pepi Kimas (2007) N3209
Komealia Ape of the Yala Clan v John Giheno (Minister for Mining & Petroleum) (1996) N1498
Telikom PNG Limited v ICCC and Digicel (PNG) Ltd (2007) N3143

Counsel

B W Meten, for the plaintiff
R J Mann-Rai, for the defendant

19 December, 2011

1. CANNINGS J: This is a ruling on a motion by the plaintiff, Gogl Naru Resource Owners Association Inc, seeking an interim injunction to restrain the defendant, Jant Ltd, from conducting any further timber operations and removing any of its property from the Gogl-Naru Timber Area in Madang Province. The grounds on which the interim injunction is sought are that the Timber Permit No 12-22 and the Project Agreement between Jant and the State, under which Jant has been operating its woodchip operations since 1995 (and before that, under other permits and agreements, since the early 1970s) have recently expired, but Jant has been unlawfully felling trees and transporting them to its site in Madang town. The plaintiff commenced proceedings by originating summons on 24 November 2011, seeking declarations as to the effect of expiry of the permit and the agreement and a permanent injunction against Jant.

RELEVANT CONSIDERATIONS

2. The primary considerations to be taken into account when a person seeks an interim injunction were confirmed by the Supreme Court in Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853 as being:

(a) are there serious questions to be tried and does an arguable case exist?
(b) has an adequate undertaking as to damages been given?
(c) would damages be an inadequate remedy if the interim order is not made?
(d) does the balance of convenience favour the granting of interim relief?
(e) do the interests of justice require that the interim injunction be granted?

3. Those considerations have been set out so that a 'yes' answer will be a factor weighing in favour of granting an interim injunction and a 'no' answer will work against making such an order.

(a) ARE THERE SERIOUS QUESTIONS TO BE TRIED?

4. This requires the Court to make an assessment of the prospects of success of the plaintiff's substantive action by looking at the originating process and the evidence that has been adduced to date. The issue is not simply whether the plaintiff has raised serious allegations, but whether the plaintiff appears to have a reasonable prospect of ultimately succeeding (Ewasse Landowners Association Inc v Hargy Oil Palms Ltd (2005) N2878). Put another way, the court assesses whether there are serious questions to be tried and the plaintiff has a serious, not merely speculative, case, with a real possibility of ultimate success.

5. I am not satisfied after assessing the material filed by both the plaintiff and the defendant that the plaintiff has a strong case. I uphold the submission of Mr Mann-Rai, for Jant, that it is questionable whether the plaintiff has standing to obtain the relief sought in the originating summons, given that it is not recognised in the project agreement as being a landowner representative. There is another landowner representative referred to – Gona Development Corporation – and the relationship between that corporation and the plaintiff is unclear. It is also unclear what precise interest the plaintiff has in the land covered by the Gogl-Naru Timber Area. The question of whether the applicant for an interim injunction has a sufficient interest in the proceedings in which the injunction is sought is a matter that goes to the question of whether the plaintiff has a serious, not a speculative case (B Fortunaso Ltd v Bank of South Pacific Ltd [1992] PNGLR 275; Komealia Ape of the Yala Clan v John Giheno (Minister for Mining & Petroleum) (1996) N1498). The answer to question (a) is no.

(b) HAS AN ADEQUATE UNDERTAKING AS TO DAMAGES BEEN GIVEN?

6. An undertaking has been signed and filed by Mr Essau K Wareh, the plaintiff's chairman. However it is not endorsed with the plaintiff's seal. As the plaintiff is an incorporated association, the undertaking, to be regarded as acceptable, meaningful and adequate should generally be endorsed with a corporate seal (Telikom PNG Limited v ICCC and Digicel (PNG) Ltd (2007) N3143; Fulleborn Plantations Ltd v Pepi Kimas (2007) N3209). Question (b) is answered no.

(c) WOULD DAMAGES BE AN INADEQUATE REMEDY?

7. What will happen if an interim injunction is not granted, but it turns out the plaintiff succeeds at the trial and proves that Jant has been operating unlawfully? Would damages be an inadequate remedy? The answer is no. The plaintiff could in my view be adequately compensated with an award of damages.

(d) DOES THE BALANCE OF CONVENIENCE FAVOUR GRANTING THE INJUNCTION?

8. As I said in Ewasse Landowners Association Inc v Hargy Oil Palms Ltd (2005) N2878 this requires the court to ask: what is the best thing to do on an interim basis taking into account the conflicting interests? What will happen if an injunction is not granted? What will happen if the injunction is granted? Who will suffer the greatest inconvenience or prejudice? If an injunction is not granted, Jant's activities will continue to be monitored by the PNG Forest Authority, which has a branch in Madang. The evidence filed to date suggests that the Authority is well apprised of the expiry of the permit and the agreement and is in the best position to and is taking active steps to manage the implications of their expiry and any landowner issues that may arise. A demobilisation exercise was negotiated between Jant and the Provincial Forest Officer and Jant was allowed until 9 November 2011 to complete its demobilisation. That is the critical date and it appears that the evidence that the plaintiff has presented of arguably unlawful timber activities by Jant relates to observations made by various people in early November, before the 9th. If an interim injunction is granted, this may have the effect of distracting the Authority's attention away from managing the situation. An injunction is unnecessary. The best thing is to preserve the status quo and allow the PNGFA to do its job. Question (d) is answered no.

(e) DO THE INTERESTS OF JUSTICE REQUIRE THAT THE INJUNCTION BE GRANTED?

9. I do not think so, given the absence of prima facie evidence that the defendant is guilty of unlawful or improper conduct. Question (e) is answered no.

CONCLUSION

10. As none of the five considerations favour the plaintiff's case, the application will be refused. As the motion has failed, it is appropriate that the plaintiff bears the defendant's costs.

ORDER

(1) All relief sought in the plaintiff's notice of motion filed on 24 November 2011 is refused.

(2) The plaintiff shall pay the defendant's costs of the motion, on a party-party basis, to be taxed if not agreed.

Ruling accordingly.
____________________________

Meten Lawyers: Lawyers for the plaintiff
Warner Shand Lawyers: Lawyers for the defendant