Unevulg Development Corporation Ltd v Volele [2013] PGNC 34; N5089 (4 February 2013)

N5089

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

O. S. NO. 710 OF 2012

BETWEEN:

UNEVULG DEVELOPMENT CORPORATION LIMITED
Plaintiff

AND:

NIXON VOLELE
First Defendants

AND:

ALABA DEVELOPMENT CORPORATION LIMITED
Second Defendant

Kokopo: Lenalia, J.
2012: 24th December
2013: 4th February

PRACTICE & PROCEDURE – Injunctions – Application to set aside ex parte orders – Order 12 Rule 8 of the National Court Rules

PRACTICE & PROCEDURE – Application to set aside ex parte injunctive relief – National Court Jurisdiction – Section 155(4(5) of the PNG Constitution

PRACTICE & PROCEDURE – Substantive declaratory orders sought – Arguable case – Application to set aside refused

Case cited

Mainland Holdings Limited -v- Paul Robert Stobbs & 3 Ors (2003) N2522
Mark Ekepa & Others -v- William Gaupe & Others (2004) N2694
Pius Niu -v- Senior Sergeant Mas Tanda and the State (2004) N2765
East Arowe Timbers Resources Limited & 3 Others-v-Cakara Alam (PNG) Limited
Jimi Co-op Daries Ltd -v- Capital Diary Products Ltd (1989) I PRNZ 622

Counsel

No appearance, for the Plaintiff.
Mr. J. Gah, for the Applicant/Defendants

4th February, 2013

1. LENALIA, J: The plaintiff company is seeking certain declaratory orders in the Originating Summons filed on 30th November 2012. Then on 7th December 2012, this Court granted a set of orders inter alia two orders against the First and Second Defendants to freeze their Bank of South Pacific Accounts for reasons that, the First and Second Defendant are illegally applying funds in breach of s.121 of the Forestry Act.

2. Following those orders, Mr. Gah of counsel representing the two defendants applied to set aside the orders on the basis that the two plaintiffs are operating illegally as they have no legal rights or authority either in law or equity to apply, disburse or use in any way deal with the Logging Export Development Levy (LEDL) funds.

3. The defendants say, the funds do rightly belong to the Extended Mengen and Madedua TRP areas and the plaintiff itself is the one responsible for administering such funds for and on behalf of the people from Mengen and Madedua TRP forestry areas. The defendants' Notice of Motion seeks the following orders.

1. That pursuant to Order 12 Rule 8(3) (a) of the National Court Rules, set aside the orders made on 7th December 2012.

2. That the proceedings OS. No.710 be transferred to Kimbe National Court Registry Office.

3. Costs to be in the cause.

4. On arguing their application Mr. Gah gave a brief account of the history of the case. His submission basically is that the interim orders obtained by the plaintiff on 7th December last year should be set aside for reasons that, there has been certain disagreements between the Plaintiff company and the First and 2nd Defendants.

5. He referred to Stanis Valu's affidavit saying he no longer lives in and around Madedua and Mengen TRP areas. He now resides in Rabaul with his second wife. Counsel's submission is that the Second Defendant and Gilo Development Corporation are the only two subsidiary and successors of Unevugl Development Corporation.

6. He submitted that the Second Defendant and Gilo Development Corporation Ltd have served their purpose through tangible development projects and have shared benefits equally between land owners and shareholders in the two TRP areas in the Mengen area and so the ex parte orders should be lifted.

7. Counsel named certain people who are supposed to be land owners and one or two who are not land owners but who instigate grudges between Unevugl Corporation Limited and Alaba Development Corporation Limited.

Law

8. Order 12 rule 8 of the National Court Rules states as follows:

"(1) The Court may, on terms, set aside or vary a direction before entry of judgment where notice of motion for the setting aside or variation is filed before entry of the judgment,

(2) The Court may, on term, set aside or vary a judgment -

(a) where the judgment has been entered pursuant to Order 12 Division 3 (default judgment); or

(b) where the judgment has been entered pursuant to a direction given in the absence of a party, whether or not the absent party had notice of trial or of any motion for direction; or

(c) when the judgment has been entered in proceedings for possession of land pursuant to a directions given in the absence of a person and the Court decides to make an order that the person be added as a Defendant.

(3) The Court may, on terms, set aside or vary an order of a party,whether or not the absent party is in default of giving a notice of intention to defend or otherwise in default, and whether or not the absent party had notice of motion for the order; or

(4) In addition to its power under Subrules (1),(2) and (3), the Court may,on terms, set aside or vary any order (whether or not part of a judgment) except so far as the order determines any claim for relief or determines any question (whether of fact or law or both) arising on any claim for relief and expecting an order for dismissal of proceedings or dismissal of proceedings so far as concerns the whole or any part or any part of any claim for relief.

(5) This Rule does not affect any other power of the Court to set aside or vary a judgment or order"

9. The Court's jurisdiction to set aside an ex parte order can also be found in sections 155(3)(a) & (4) and Schedule 2.2 of the Constitution and Order 12 rule 8 of the National Court Rules. The National Court is generally obliged to apply and enforce, as part of the underlying law, the principles and rules of common law and equity in England that were formed before Independence Day: East Arowe Timbers Resources Limited & 3 Others-v-Cakara Alam (PNG) Limited (2008) N3270.

10. The ex parte Interim Injunction of 7th December was granted by this Court after hearing the ex parte application by Mr. Asa of counsel for the plaintiff.

11. An injunction is an equitable remedy. To decide whether to grant an injunction, the National Court relies on the rules of equity that were adopted on Independence. Some of those rules were neatly summarized by His Honour Injia, DCJ (as he then was), in Mainland Holdings Pty Limited & Others -v- Paul Stobbs & Others (2003)N2694 and His Honour Mr. Justice Cannings in Mark Ekepa & Others -v- William Gaupe & Others (2004) N2694 referred to by Mr. Griffin of counsel for the First Defendant. See also His Honour Mr. Justice Canning's Judgment in Pius Niu -v- Senior Sergeant Mas Tanda and the State (2004) N2765.

12. Case law authorities establish that in deciding whether to set aside an injunction, the National Court relies also on the principles of equity that were adopted on Independence Day. The principles stated in above cases have also been referred to in East Arowe Timbers Resources Limited & Ors -v- Cakara Alam (PNG) Limited, Papua New Guinea Forest Authority & Martin Mato (2008) N3270. I list these principles hereunder:

1. There must be change of relevant circumstances.
   
2. The Court must look at the conduct of the parties at the time the order was made and after. That is, whether the party who has obtained the interim order has come to Court with clean hands.
   
3. Whether the party who has obtained an interim order has disclosed all relevant information including those that may operate against it to the Court at the hearing of the application.
   
4. Whether the interim order was made on an erroneous basis.
   

13. In the Mainland Holdings Limited's case (supra), his Honour referred to the New Zealand case of Jimi Co-op Daries Ltd -v- Capital Diary Products Ltd (1989) I PRNZ 622 and found it persuasive and applied it in that case. The Court there said that, the exercise of discretion should be limited to the change in relevant circumstances since the order, which would render the continuation of the interlocutory order, unnecessary or inappropriate in the circumstances

14. It is established law that, the National Court has jurisdiction to set aside its earlier interim orders. This power exists irrespective of whether previous injunctive orders were made by the same Judge who is dealing with the application to set aside the previous orders: Mark Ekepa & Others-v-Porgera Landowners Association and 2 Others (2004) N2694. 15.However lately in Malt-v-Queen (2009) N3577, Makail AJ (as he then was) held amongst others that an ex parte order dismissing an entire proceedings for want of prosecution, finally disposes of a proceeding, the same court does not have jurisdiction to set aside its order and only the Supreme Court can do that in an appeal.

15. On this application, I have jurisdiction to set aside my orders made on 7th December last year. I note the pleadings on the body of the Originating Summons where the plaintiff seeks a number of declaratory orders. In order 1, the plaintiff says that, the First Defendant has no legal status or authority to disburse use deal with the Logging Export Development Levy funds for the Extended Mengen and Madedua TRP areas on behalf of the plaintiff and its shareholders and their land owners.

16. They seek further orders for declarations that, the plaintiff company is a lawful and legitimate land owner entity authorized to disburse monies for the Mengan and Madedua TRP areas because the Second Defendant is illegally dealing with the plaintiffs' logging export development funds contrary to s.21 of the Forestry Act 1991 and also in breach of the administrative guidelines for the management and use of the log export development levies which amounts to fraudulent misrepresentation.

17. A surprising fact about the Originating Summons is that, the people involved in these proceedings are supposed to be from the same locality around Biala District, West New Britain Province. When reading the plaintiff's affidavit at the time the Court granted the injunction, I asked myself a question, how is it that as deposed to by Mr. Peter Tolelke, the defendants can apply for access of the funds on behalf of resource owners when in case of the First Defendant he has not been duly authorized to make any dealings by the plaintiff's board.

18. According to Peter, the Second Defendant company may be made up of eight (8) individuals which does not represent the whole of the Mengen and Madedua people who are or may be more than 5, 000 people.

19. This information was available to the Court at the time and date the injunctive orders were granted. In fact the manner in which these proceedings has been dealt with and orders given is to temporarily hold those funds that is being applied otherwise than for the purposes such funds are paid to land owner companies.

20. Peter further deposes that, in the Mengen and Madedua areas, there are three major clans with 36 business groups who are shareholders of Unevugl Development Corporation Limited.

21. I am not satisfied with the evidence deposed to by Nixon Volele as there is an arguable case in the substantive proceedings questioning the legality and status of the First and Second Defendants. I refuse this application and order costs to be in the cause.
_______________________________________________________
Jackson Gah & Associate Lawyers: Lawyer for Defendants.