Yalo v White [2015] PGNC 310; N7035 (2 October 2015)

N7035

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS 529 of 2015

BETWEEN:
KARL KEREPA YALO
Plaintiff

AND
IAN WHITE
Defendant

Waigani: Hartshorn J
2015: 1^st & 2^nd October

Application for continuation of interim injunctive orders

Cases Cited:
Papua New Guinea Cases

Craftworks Niugini Pty Ltd v. Allan Mott (1977) SC525
Robinson v. National Airlines Commission [1983] PNGLR 478
Markscal Limited v. MRDC [1996] PNGLR 419
National Council of Young Mens Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569
PAC LNG International v. SPI (208) Limited (2014) N5861

Overseas Cases

American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396

Counsel:

Mr. L. Manua, for the Plaintiff
Mr. E.G. Andersen and Ms. J. Nigs, for the Defendant

Oral decision delivered on
2^nd October, 2015

1. HARTSHORN J: This is a decision on whether interim relief that has already been granted should continue.
   
2. On 21^st August 2015, this Court granted interim orders that amongst others, the defendant was restrained from dealing, selling or flying four specified helicopters. Those orders have been extended and remain in force.
   

Background

3. The plaintiff is the majority shareholder of a company called “The Helicopter Services Niugini Limited” (THSN), holding 51 per cent of the shares. The defendant holds 49 per cent of the shares. The plaintiff and defendant are both directors of THSN and the defendant is the Chief Executive Officer.
   
4. The plaintiff contends that his working relationship with the defendant has deteriorated and that he is not being kept informed of the details and operations of THSN. He has requested Board meetings to be held but these have not eventuated. Further, he became aware that THSN, including the four helicopters that he believes are assets of THSN, were advertised for sale, in an Australian magazine called Aviation Trader. As a consequence he has commenced this proceeding by Originating Summons in which he seeks that amongst others, a poll meeting or such other meeting of shareholders be conducted, and that the defendant be restrained from selling the four subject helicopters unless such sale is authorized by all of the shareholders of THSN.
   

Law

5. The first consideration in determining whether injunctive relief should be granted is whether there is a serious question to be tried: American Cyanamid Company v. Ethicon Limited [1975] UKHL 1; (1975) AC 396, Craftworks Niugini Pty Ltd v. Allan Mott (1977) SC525 and PAC LNG International v. SPI (208) Limited (2014) N5861 are authorities for this proposition.
   
6. A serious question to be tried has been interpreted to mean:
   

“What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success.... ”: Robinson v. National Airlines Commission [1983] PNGLR 478 and

“....... a strong case which, on the evidence presented would support a permanent injunction”: Markscal Limited v. MRDC [1996] PNGLR 419.

7. The parties have filed affidavits in support of their respective positions. As to the court’s consideration of that evidence at this stage, I am mindful of the works of Lord Diplock in American Cyanamid Company v. Ethicon Limited (supra):
   

“It is not part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations.”

Whether there is a serious question to be tried

8. There are two parts to the substantive relief sought. The first is the alleged entitlement to a shareholders meeting and the second is that the plaintiff is entitled to possession of the helicopters because the company THSN is entitled to them. It is in respect of the second part of the substantive relief that the interim injunctive relief is sought. It was granted and is now sought to be extended.
   
9. The plaintiff in his evidence deposes that THSN owns the helicopters. The only evidence of this apart from the plaintiff’s assertion, is that the helicopters are registered in THSN’s name. That however does not confer ownership, but merely a right to possession: s. 46(1) Civil Aviation Act 2000. The plaintiff also asserts that because a guarantee may not have been paid, that this somewhere means that ownership of the helicopters has transferred to THSN.
   
10. The evidence from the defendant as to ownership and possession is extensive and supported by appropriate documentation. It is to the effect that:
    
    1. The helicopters are owned by Australian Helicopters Traders Pty Limited, an Australian company, and are mortgaged to the National Australian Bank;
       
    2. The helicopters were chartered to THSN for a three year period from the date of registration in Papua New Guinea. This has now lapsed. The dates of registration in Papua New Guinea were from March to June 2012 for the four helicopters.
       
11. There is further evidence that THSN has failed to comply with payment obligations under the charter agreements and currently owes about USD$1.8 million or K5.2 million.
    
12. The evidence of the plaintiff in his latest affidavit, does not assist in his assertion that THSN owns the helicopters. At paragraph 7 page 3, the plaintiff deposes that he can confirm that amongst others, ownership of the helicopters remained with Australian Helicopter Traders Pty Limited. There is no evidence of any dealing or transfer of the ownership of the helicopters from Australian Helicopter Traders Proprietor Limited to THSN.
    
13. The contention of the plaintiff that the process of bringing the helicopters into Papua New Guinea and/or the non-payment of a guarantee, means that the ownership of the helicopters is now with THSN, does not have merit and in any event is not supported by the evidence. This is especially so given the evidence of the defendant that the ownership of the helicopters is with Australian Helicopter Traders Pty Limited.
    
14. Given this, I am satisfied that the plaintiff and THSN have no right or entitlement to the helicopters. As the plaintiff has no such right or entitlement, he does not have a serious question to be tried in respect of the helicopters. Consequently, on settled and established case authority, he is not entitled to the injunctive relief that was granted, and it is set aside.
    
15. I mention that the plaintiff’s counsel approached the hearing on the basis that this was an application to set aside or vary injunctive relief, as distinct from the return of an ex parte hearing to determine whether interim relied should continue.
    
16. Putting aside whether that approach is correct, if the application is considered on this basis, then I refer to the decision of Gabi J, in National Council of Young Mens Christian Association of PNG Inc. v. Firms Service Limited (2010) N4569. In that case his Honour said that there are six considerations to be taken into account in deciding whether to discharge or vary an interim injunctive order. The six considerations are:
    

“First, has there been any change in circumstances since the previous orders were made, which render their continuation unnecessary or inappropriate? Second, what has been the relative conduct of the parties since the earlier orders were made? Third, are there previously undisclosed relevant facts, which have been discovered since the interim orders were made? Fourth, has it subsequently been discovered that the order was granted on an erroneous legal basis? Fifth, where (sic) the grounds relied on to support the setting aside or variation of the interim order argued before the Court when it granted the earlier order? Or did the party wanting to discharge or vary the earlier order have the opportunity to raise those grounds? Finally, was the court misled when it issued the ... order? If yes, was that attributable to the conduct of the party which sought the ... order?”

17. First, as to any change of circumstance since the interim relief was granted – there has not been any.
    
18. Second: the relevant conduct of the parties since the previous orders were made – there is no evidence of anything adverse on behalf of either party.
    
19. Third: are there previously undisclosed relevant facts which have been discovered since the injunctive relief was granted? In this instance there have been. There is the evidence from the defendant that the plaintiff and THSN do not own or have any entitlement to the helicopters.
    
20. Fourth: was the injunction granted on an erroneous legal basis? It was not. The court formed the view on the evidence before it that the plaintiff had a serious question to be tried and further, that damages were not an adequate remedy.
    
21. As to the fifth and sixth considerations, as the application had been made ex parte, the defendant was not able to put his evidence and argument.
    
22. As to whether this Court was misled, I will give the plaintiff the benefit of the doubt and assume that he believed that THSN owned the helicopters.
    
23. Taking into account the undisclosed evidence concerning the ownership and entitlement to the helicopters – rendering the plaintiff not to have a serious question to be tried in regard to their ownership and possession, and further, that the defendant was not given the opportunity to put his argument and evidence before the court, I am satisfied that the injunctive relief that was granted should be set aside.
    

Orders

24. The formal orders of the Court are:
    
    1. All of the relief sought in the Notice of Motion of the plaintiff filed 19^th August 2015 is refused and the interim relief that was granted is set aside;
       

b) The plaintiff shall pay the defendant’s costs of and incidental to the said notice of motion;

c) Time is abridged.

__________________________________________________________________
Rageau, Manua & Kikira Lawyers: Lawyers for the Plaintiff
Gadens Lawyers: Lawyers for the Defendant