Independent Public Business Corporation of Papua New Guinea v Motor Vehicles Insurance Ltd [2017] PGNC 46; N6667 (6 January 2017)

N6667

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS 1252 of 2010

BETWEEN:

INDEPENDENT PUBLIC BUSINESS CORPORATION
OF PAPUA NEW GUINEA

Plaintiff

AND:
MOTOR VEHICLES INSURANCE LIMITED
First Defendant/First Cross Claim Defendant/Second Cross Claimant

AND:
NOMINEES NIUGINI LIMITED
Second Defendant/First Cross Claimant/First Cross Defendant to Second Cross Claim

AND:
NATIONAL SUPERANNUATION FUND LIMITED
Third Defendant

AND:
BENJAMIN TERENCE O’DWYER. TERENCE JAMES O’DWYER and BACKWELL LOMBARD CAPITAL PTY LTD
Second Cross Defendants to Second Cross Claim

AND:
DR JOHN MUA

Third Cross Defendant to Second Cross Claim

AND:

BERNARD FONG

Fourth Cross Defendant to Second Cross Claim

Waigani: Hartshorn J
2016: 10^th February
2017: 6^th January

Application for interim injunction – Order 14 Rules 10(1) and (3) National Court Rules

Cases:
Collison v. Warren [1901] UKLawRpCh 65; [1901] 1 Ch 812
Canopus No. 16 Ltd v. Maisi Trust Co Ltd (2008) N3401

Counsel:
Mr. K. Imak, for the Plaintiff
Ms. E.G. Andersen, for the First Defendant/Second Cross Claimant
Mr. R. Mulina, for the Second Defendant
Mr. J. Brooks, for the Third Defendant

6^th January, 2017

1. HARTSHORN J: This is a decision on a contested application for an interim injunction and for money to be paid into the National Court Registry Trust Account.

2. Nominees Niugini Limited (NNL), the second defendant, first cross claimant and first cross defendant to the second cross-claim, applies for amongst others:

1. an injunction to restrain Motor Vehicles Insurance Limited (MVIL), the first defendant, first cross claim defendant and second cross claimant, from in any way dealing with the sum of AUD $20 million ordered in MVIL’s favour by the New South Wales Supreme Court in proceedings styled Motor Vehicles Insurance Limited v. Woodlawn Capital Propriety (sic) Limited [2014] NSWSC 1846;
2. that the sum of AUD $20 million or its Kina equivalent be directly paid into the National Court Registry Trust Account;

until the determination of the substantive proceeding.

3. NNL relies upon Order 12 Rule 1 and Order 14 Rules 10(1) and (3) National Court Rules.
4. The application is opposed by MVIL and the plaintiff, Independent Public Business Corporation (IPBC). National Superannuation fund, the third defendant, takes no position.

Background

5. This proceeding concerns an Equity Monetisation Contract (EMC) between MVIL and NNL. IPBC seeks amongst others to set aside the EMC as it is claimed that it was entered into in breach of certain statutory requirements.

This application

6. NNL submits that the orders sought should be granted as amongst others:

1. the subject AUD $20 million comes within the ambit of Order 14 Rules 10(1) and (3) National Court Rules as it is part of the K100 million that NNL pleads is indebted to it by MVIL in its amended defence to the second further amended statement of claim;
2. MVIL admits that it did not obtain s. 46B Independent Public Business Corporation Act approval;

100. This court varied court orders to include that Bank South Pacific Ltd (BSP) pay the 2014 final dividend payable on BSP shares held by NNL directly into the National Court Registry Trust account pending determination of this proceeding;

4. There are serious issues to be tried;
5. NNL has filed an undertaking as to damages;
6. Damages would not be an adequate remedy if the interim orders sought are not granted;
7. NNL will be prejudiced if the subject funds are continued to be held by MVIL as there is no guarantee that MVIL will repay the full amount of K100 million;
8. The balance of convenience favours, and the interests of justice, requires the grant of the interim orders sought.
   

7. MVIL submits that the orders sought should not be granted as amongst others:

1. The AUD $20 million does not come within “property” or “fund” in Order 14 Rules 10(1) and (3) National Court Rules;
2. NNL does not assert a proprietary, legal or equitable interest in the proceeds of any action against Woodlawn Capital Proprietary Limited (Woodlawn);

100. If NNL succeeds in its defence to MVIL’s cross-claim, no payment is required to be made by MVIL to NNL;

4. If NNL substantively loses, then by virtue of MVIL’s second cross claim and NNL’s cross-claim, the BSP shares held by NNL will only be returned to MVIL in exchange for an amount of money to be determined, and possibly costs and remuneration of NNL for securing the K100 million;
5. There is no arguable case that NNL has any rights to the Woodlawn money and no claim is made by NNL to the Woodlawn money in the proceeding;
6. There is no evidence of how NNL would be affected or of any particular inconvenience that it would suffer if the interim orders sought are not granted;
7. The undertaking as to damages is not sufficient as NNL is a nominee company with no apparent assets with which any award of damages could be paid;
8. NNL’s claim is one of monetary value and so damages would be an adequate remedy;
9. MVIL is a substantial organisation capable of paying any damages;
10. The balance of convenience favours, and the interests of justice require, that the orders sought not be granted.
    

Consideration

8. Order 12 Rule 1 National Court Rules in essence allows the court at any stage of proceedings on the application of any party, to make such orders as the nature of the case requires notwithstanding that, the applicant does not make a claim for those orders in the originating process. As I said in Canopus No. 16 Ltd v. Maisi Trust Co Ltd (2008) N3401, this Rule provides for what was permitted in Collison v. Warren [1901] UKLawRpCh 65; [1901] 1 Ch 812. In that case a defendant successfully obtained a mandatory injunction against the plaintiff even though he had not filed a counterclaim, as what he was seeking arose out of the same contract upon which relief was being sought in the proceedings.

9. Order 14 Rule 10 is as follows:
“10 Preservation of property
(1) In proceedings concerning any property, or in proceedings in which any question may arise as to any property, the Court may make orders for the detention, custody or preservation of the property.
(2) An order under Sub-rule (1) may authorize any person to enter any land or to do any other thing for the purpose of giving effect to the order.
(3) In proceedings concerning the right of any party to a fund, the Court may order that the fund be paid into Court or otherwise secured.”

10. NNL relies upon Keyapaka Investments Pty Ltd v. Dat (1998) N1772 a decision of Injia J (as he then was) in which His Honour held that the court has unlimited jurisdiction to issue injunctions, interim or permanent, for the preservation of property, real or personal, whether the property be situated on customary land or registered land.

11. The first consideration is whether the relief sought in paragraph 1 of NNL’s notice of motion comes within the ambit of Order 14 Rules 10(1) and (3). The property that NNL seeks to restrain MVIL from dealing with is, “$AU 20,000,000.00 or the equivalent in Kina currency, ordered in favour of the First Defendant (MVIL) on 17 December 2014 pursuant to an order of the New South Wales Supreme Court in the proceedings styled Motor Vehicles Insurance Limited v. Woodlawn Capital Propriety (sic) Limited [2014] 1846” (Property).

12. The Property is a sum ordered by a foreign court in a foreign court proceeding to be paid by Woodlawn to MVIL.

13. NNL submits that the Property is “property” for the purposes of Order 14 Rule 10(1) and “fund” for the purposes of Rule 10(3). As to “Proceedings concerning” or “in which a question may arise as to”, that property is the K100 million that has been the subject of this action, submits NNL, and the AUD $20 million is part of the K100 million that was advanced to MVIL.

14. MVIL submits that the wording in Rule 10(1) that gives jurisdiction to the court to make orders for the detention, custody or preservation of “the property” uses the definite article and so “the property” in respect of which the court is given jurisdiction to make orders must be that referred to previously in Rule 10(1). Similarly, in Rule 10(3) it is “the fund” which can be ordered to be paid into court and it must be “the fund” in respect of which proceedings concerning rights to that fund have been commenced.

15. To my mind, the use of the definite article in “the property” in Rule 10(1) grants jurisdiction only in respect of that property which is the subject of the proceedings, or in respect of any question that has arisen concerning that property. Similarly, “the fund” which can be ordered to be paid into court must be “the fund” in respect of which proceedings concerning the right of a party to a fund have been commenced. If it were otherwise, the court would be able to make orders concerning property even though the substantive proceeding was not brought in respect of that particular property. In my view such a scenario is not what was intended.

16. MVIL submits further that money that MVIL recovered from Woodlawn is not the subject of this proceeding.

17. In my view the Property, being a sum ordered by a foreign court in a foreign court proceeding to be paid by Woodlawn to MVIL, is not “the property” or “the fund” the subject of this proceeding for the purposes of Order 14 Rules 10(1) and (3) National Court Rules as amongst others, the money recovered from Woodlawn in a foreign court by MVIL is not the subject of this proceeding. Consequently this court does not have jurisdiction under the Rules referred to in NNL’s notice of motion to grant the relief that NNL seeks.

18. Given this, it is not necessary to consider the other submissions of counsel.

Orders
19.
a) The relief sought in the notice of motion of the second defendant filed 2^nd November 2015 is refused;
b) The second defendant shall pay the costs of the plaintiff and the first defendant of and incidental to the said notice of motion;
c) Time is abridged.

_____________________________________________________________
Allens Lawyers : Lawyers for the Plaintiff
Gadens Lawyers : Lawyers for the First Defendant
Leahy Lewin Lowing Sullivan Lawyers: Lawyers for the Second Defendant
Ashurst Lawyers : Lawyers for the Third Defendant