Hanpan No. 1 Ltd v Nett Holdings Ltd [2016] PGNC 438; N7639 (16 June 2016)

N7639

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 259 OF 2015

HANPAN NO. 1 LIMITED
Plaintiff

-V-

NETT HOLDINGS LIMITED
Defendant

Waigani: Kariko, J
2016: 16^th June

CIVIL PRACTICE & PROCEDURE – application for contempt – alleged disobedience of a court endorsed consent order – application made separately to set aside consent order - whether separate proceedings required for contempt application – whether application to set aside be heard first

Cases Cited:
Papua New Guinea Cases

Lipsey v The State [1993] PNGLR 405
Mali v State (2002) SC690
Yap v Tan [1987] PNGLR

Overseas Cases:

Lazarus Estates v Beasley [1956] 1 All E.R
Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28FLR 195

Counsel:

Mr D Kipa, for the plaintiff
Mr M Nale, for the defendant

RULING

16^th June, 2016

1. KARIKO, J: The plaintiff has filed an application for this Court to find the defendant guilty of contempt and to be punished for it. The application is based on the allegation that the defendant has breached consent orders approved by the Court on 27^th October 2015 to settle the dispute between the parties.
   
2. In turn, Nett Holdings has filed separate proceedings against Hanpan No. 1 (WS No. 493 of 2016 – Nett Holding Ltd v Hanpan No. 1 Ltd) to have the consent orders set aside on grounds of fraud, claiming that Hanpan No. 1 induced Nett Holding through fraudulent or false representations to execute the consent orders.
   

Issues

3. I have heard submissions on two questions:
   
   • whether Nett Holding has correctly filed the separate proceedings WS No. 493 of 2016 or should it have been filed as part of these proceedings OS 259 of 2015; and
   • whether the contempt application should be heard first as filed first in time, or that it should follow determination of the proceedings WS No. 493 of 2016
     

Consideration

4. I am of the view that Nett Holdings has properly filed proceedings WS No. 493 of 2016. A party who wishes to set aside a judgement alleged to have been obtained by fraud must bring a separate action for that purpose: Permanent Trustee Co (Canberra) Ltd v Stocks & Holdings (Canberra) Pty Ltd (1976) 28FLR 195 referred to in Mali v State (2002) SC690, Lipsey v The State [1993] PNGLR 405.
   
5. As to the second issue, Nett Holding submits that an order obtained by fraud is void ab initio and therefore any breach of the order cannot constitute contempt. The defendant relies on Lazarus Estates v Beasley [1956] 1 All E.R. for the proposition that a party cannot benefit from an order obtained by fraud. On the other hand, Hanpan No. 1 argues that an order of the court (including a consent order endorsed by the Court) is a valid order that must be complied with until such time that it is set aside by a Court of competent jurisdiction, even where a party affected by the order believes it to be void. This statement of law has been stressed in many cases including Yap v Tan [1987] PNGLR 227.
   
6. I do not consider it necessary at this point in time to decide which of the arguments is correct. What is clear to me is that a decision either way would have a bearing on liability and penalty in the contempt application. If that decision is in favour of Nett Holding, then that would have a bearing on liability in the contempt application. But if the decision goes against Nett Holding, it may only be relevant for purposes of penalty.
   

Conclusion

7. In the circumstances therefore, I am of the opinion that the application to set aside the consent orders should be heard and decided first. The contempt application filed by the plaintiff on 31^st March 2016) in these proceedings is adjourned generally pending determination of proceedings WS No. 493 of 2016.

________________________________________________________________
Twivey Lawyers: Lawyer for the Plaintiff
Jema Lawyers: Lawyer for the Defendant