Milne Bay Sustainable Development Corporation Ltd v Kautu [2018] PGNC 608; N9240 (31 July 2018)

N9240

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

OS NO. 505 OF 2018

BETWEEN:
MILNE BAY SUSTAINABLE DEVELOPMENT CORPORATION LIMITED
First Applicant

AND:
MILNE BAY SEAFOOD EXPORTER LIMITED
Second Applicant

AND:
MUYUW LIMITED
Third Applicant

AND:
RUBEN KAUTU (CHAIRMAN) AND ALL MEMBERS OF THE BOARD OF THE NATIONAL FISHERIES AUTHORITY
First Respondent

AND:
JOHN KASU, MANAGING DIRECTOR, NATIONAL FISHERIES AUTHORITY
Second Respondent

AND:
NATIONAL FISHERIES AUTHORITY
Third Respondents

AND:
MICHAEL KAPE, PROVINCIAL ADMINISTRATOR & CHAIRMAN AND ALL MEMBERS OF THE MILNE BAY PROVINCIAL MANAGEMENT COMMITTEE
Fourth Respondent

AND:
HON. SIR JOHN LUKE CRITTIN KBE, CBE, MP, GOVERNOR OF MILNE PROVINCE
Fifth Respondent

Alotau: Toliken J
2018: 31^st July

PRACTICE AND PROCEDURE – Application for interim injunction – Applications for Beche-de-mer fishery licences – Refusal by National Fisheries Authority Board – Requirements for injunctive relief considered – Requirements satisfied – Requirement to exhaust administrative avenues – Fisheries Management Act provides for appeal process – Applicants did not avail themselves to appeal process – Motion denied – Constitution, s 155 (4), National Court Rules, Order 4, Rule 38 (2) (a)(c)(d), National Fisheries Management Act 1998, s 44.

Cases Cited:

Anthony John Polling v. Motor Vehicles Insurance (PNG) Trust and Bowmans Bougainville Pty Ltd and Bougainville Development Corporation Ltd [1986] PNGLR 228
Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853
Frances Wane & Ors v Sir Luke Crittin & Ors; OS 793 of 2017 (unnumbered Kuijk v. Kuijk [1977] PNGLR 253
and unreported judgment dated 20^th October 2017)
Mauga Logging Company Pty Ltd v South Pacific Oil Palm Company Pty Ltd (No.1) [1977] PNGLR 80
Reimann v Skell (2001) N2093
Saud v Paining (2015) N5905)
The Public Prosecutor v The Chief Justice [1992] PNGLR 316

Counsel:

S Alberic, for the Applicants

RULING ON MOTION

31^st July, 2018

1. TOLIKEN J: By Notice of Motion dated 30^th July 2018, the Applicants, pursuant to Section 155(4) of the Constitution and the inherent powers of the Court seek, among others, orders to (1) restrain the First, Second and Third Respondents and their employees, agents and licencees from implementing the opening of the Beche-de-mer fishery for the 2018 fishing season, in Milne Bay Province; (2) an order in the form of mandamus that the decision of the First and Second Respondents is null and void and of no effect and (3) that Fourth and Fifth Respondents be restrained from facilitating or taking any decision, action or exercising any power or function in relation to the Applicants.
   
2. And pursuant to Order 4 Rule 38(1)(a)(b) and (c) of the National Court Rules, they seek dispensation of the requirement for service of the Originating Summons, this Notice of Motion and Affidavits filed in support.
   

Background

3. The Applicants are aggrieved by the Second Respondent’s refusal to renew their respective Beche-de-mer (BDM) Fish Buyers, Fish Storage and Fish Export Facility Licences in the Milne Bay Province for the 2018 fishing season. The Applicants were granted 5-year licences in 2017, which licences are subject to yearly renewals by the NFA Board.
   
4. The 2018 BDM season was to have opened in April but was postponed to 01^st August 2018. On 07^th May 2018 the National Fisheries Authority (NFA) called BDM Fishery Licence Applications for the 2018 fishing session. According to the Notice published in the Post Courier dated 07^th May 2018, licence holders were advised to lodge their applications for renewal of their licences online while new applicants were advised to lodge their applications through the respective Provincial BDM Management Advisory Committees (PMACs).
   
5. The Applicants separately lodged their renewal applications online. It appears from the material before me that the Board sat and deliberated on their applications in its Special Meeting No. 03/2018 on 05^th July 2018 and decided not to renew the Applicants’ respective licences. It also appears that the Applicants were not formally advised of the Board’s decision immediately. The Applicant’s only became aware of the non-renewal of their licences through an extract that was circulated pertaining to the new Total Allowable Catch (TAC) for each province, a Summary of the number of renewals and new applications and the List of Approved Renewals and New Applicants.
   
6. On 10^th July 2018, Frances Wane, Chairperson of the First Applicant’s Board wrote to the First Respondent demanding reasons for the non-renewal of their licences among other things. Mr. Alphonse Morona, Managing Director of the Second Applicant, and Mr. Simon Piyuwes Chairman of the Board of Directors for the Third Applicant likewise separately demanded explanations from the NFA Board for the non-renewal of their licences on 11^th July and 13^th July respectively.
   
7. On 24^th July 2018, the Second Respondent, John Kasu wrote to the Applicants, separately, but in identical terms, advising them of the non-renewal of their respective licences by the NFA Board in its Special Meeting No. 03/2018 dated 05^th July 2018 (Decision No.69/2018), and a subsequent decision of the Board on 20^th July 2018 (Meeting No.4/2018) after the Applicant’s applications were apparently resubmitted to the Board for reconsideration. Mr. Kasu said in his letter that the NFA Licensing Advisory Committee had screened the Applicants’ applications and recommended their renewal, however, the Board, based on advice from within the Board members based on the recommendations by the Milne Bay Provincial Management Advisory Committee decided not to renew the licences due to non-compliances at the provincial level which the NFA Board was unaware of, and the details of which he was not able to provide. Mr Kasu then advised the Applicants that the NFA Board resolved to refer their appeal to the province and further advised them to immediately lodge their appeal through the Office of the Governor and the PMAC for their appeal to be facilitated.
   
8. The Applicants filed these proceedings instead, seemingly in desperation as the BDM 2018 fishing season opens tomorrow.
   

Prayer for Dispensation of Requirement of Service

9. Now, let me deal firstly with the Applicants’ prayer for dispensation of the requirement for service of the Respondents.
   
10. Pursuant Order 1 Rule 7 of the National Court Rules, the Court has the power to dispense with the requirements of the Rules either before or after the need to comply has arisen. In deciding whether to exercise its discretion to dispense with the requirements of the Rules, the court must have regard to the following; the urgency of the matter; the interests of justice; the impact of the non-compliance on the parties with reference to whether in reality the other party is in as good a position as if the rules had been complied with, or whether the party has been disadvantaged in regard to its rights in the matter, whether the application for dispensation is made within a reasonable time and whether or not the intended and or the purpose of the rule in question has been met. (The Public Prosecutor v The Chief Justice [1992] PNGLR 316; Anthony John Polling v. Motor Vehicles Insurance (PNG) Trust and Bowmans Bougainville Pty Ltd and Bougainville Development Corporation Ltd [1986] PNGLR 228; Kuijk v. Kuijk [1977] PNGLR 253).
    
11. Order 4 Rule 38(2)(a)(c) and (d) further provide:
    

38. Notice necessary. (19/2)

(1) Subject to Sub-rule (2), a person shall not move the Court for any orders unless before moving he has filed notice of the motion and has served the notice on each interested party who has an address for service in the proceedings.

(2) A person may move the Court without previously filing or serving notice of the motion—

(a) where the preparation of the notice, or the filing or service, as the case may be, of the notice would cause undue delay or other mischief to the applicant; or

(b) ...; or

(c) where under these Rules or the practice of the Court for the time being the motion may properly be made without the prior filing or service, as the case may be, of notice of the motion; or

(d) where the Court dispenses with the requirements of Sub-rule (1).

12. Given the urgency of the matter, this is a case in which the requirement for service can be dispensed with. Accordingly, I dispense with the requirement for service of this motion on the Respondents.
    

Grant of interlocutory Injunctive Relief

13. The power to grant interim injunctions is discretionary, but essentially the Plaintiff must satisfy the Court of the following:
    
    • (a) whether there are serious questions to be tried and if an arguable case exists?
    • (b) whether an undertaking as to damages has been given?
    • (c) whether damages would be an inadequate remedy if the interim injunction is not made?
    • (d) whether the balance of convenience favour the granting of interim relief?
    • (e) whether the interests of justice require that the interim injunction be granted?

(See Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853; Saud v Paining (2015) N5905)

14. So, are there serious questions to be tried and does an arguable case exist? I have considered the supporting affidavit evidence and submissions by the Mr. Alberic and I agree that there are indeed serious questions to be tried, and that the Applicants do indeed have an arguable case.
    
15. Prima facie, there had been serious non-compliance with the licensing process provided under the Fisheries Management Act 1998, the Fisheries Management Regulation 2000 and the National Beche-de-mer Management Plan of 2016. For instance, the Board’s decision appears to have been based on irrelevant considerations and laced with apparent bias and conflict of interest by the presence of one Jennifer Rudd, an alleged close associate of the Governor for Milne Bay Honourable Sir Luke Crittin, who sits on the NFA Board. From the material before me it appears that the Honourable Governor has been heavily involved in the BDM fishery for a long period of time. The fact that the NFA Board’s refusal to renew the Applicants licences bespeaks of bias and conflict of interest and the Board’s referral of the Applicants to the Governor’s Office and the Milne Bay PMAC appears to be without any legal basis whatsoever. It also flies in the face of NFA’s advertorial wherein it advised existing licence holders to lodge their applications online thus avoiding the need to go through the PMAC again. The presumption there is that such applications have complied with initial requirements for grant of licences and that the renewal of licence was a matter of course subject only to licensing compliances by the NFA. Finally, but not least, the Board’s refusal to renew the Applicants’ licences flies in the face of favourable recommendations by the NFA Licensing Advisory Committee. This first requirement has therefore been met.
    
16. The second requirement is that of undertaking as to damages. The Applicants did not file an undertaking as to damages. They rely on what I said in the matter of Frances Wane & Ors v Sir Luke Crittin & Ors; OS 793 of 2017 (unnumbered and unreported judgment dated 20^th October 2017). That was a matter involving the First Applicant and the Fifth Respondent in the current case over the purported removal of the Board of Directors and Management of Milne Bay Sustainable Development Corporation by the Sir Luke Crittin and his Provincial Executive Council. In respect of the requirement to file undertaking as to damages I made the following remarks in obiter –
    
    29. Undertakings as to damages are undertakings to the Court and not to the other party. As a general rule, though, for a Plaintiff to succeed in securing injunctive relief he must give an undertaking. (Chief Collector of Taxes v Bougainville Copper Ltd (2007) (supra) The National Court Rules (Order 4 Rule 49 (5)(ii)( c) (iv)), however, envisages that an undertaking may not be appropriate in certain cases. The court’s power not to require an undertaking principally draws from Section 155 (4) of the Constitution. This provision provides –
        

“(4) Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.”

30. In Mauga Logging Company Pty Ltd v South Pacific Oil Palm Company Pty Ltd (No.1) [1977] PNGLR 80, where the Plaintiff was in receivership, Frost CJ held that an undertaking there was not necessary to do justice between the parties.
31. In Reimann v Skell (2001) N2093, a case involving the affairs of a soccer Association where the plaintiff had sought interlocutory orders for his soccer club to be allowed to take part in the Association’s competition and for its chairman (the plaintiff) to part take in meetings of the association, the court (Kandakasi J) held, on the question of undertaking’s as to damages, that such undertakings were not required in the circumstances, as the defendants in that case will not suffer any real loss.
32. Coming back to the current case, is the requirement for undertakings for damages appropriate and necessary?
33. The defendants in this case comprise of some members of the Provincial Executive Council, the First Defendant being the Governor and Chairman of PEC whilst the Second Defendants are members of PEC. I do not think that in the prevailing circumstances, they would suffer any damages, per se, should the motion be granted.
34. In fact in situations like this where the appointment and removal of directors of a State or Provincial Government corporate entity is in issue, there should not generally be any requirement for an undertaking for damages in an application for injunctive relief. This is more so, in a situation such as in the current case, where the Provincial Executive Council has made a decision to replace the whole board of Directors of the Third Plaintiff and its management and made interim appointments. This is a situation which falls squarely under court’s powers to make such orders as are necessary to do justice in the prevailing circumstances under Section 155 (4) of the Constitution.
    
17. The instant case does involve parties who are similarly placed, and I adopt what I said above. And I hold therefore that this is a situation where the requirement for an undertaking as to damages is not appropriate and I hence dispense with it.
    
18. Now the balance of convenience would in my view weigh in favour of the grant of interlocutory injunctive relief, and I further hold that damages would not be an adequate remedy. The Applicants have expended quite substantially in preparing for their operations and have made necessary improvements to their operations and in all fairness, having received no non-compliance notices from NFA, have legitimate expectations to reap fair reward from their investments.
    
19. The final requirement is whether it would be in the interest of justice to grant the interlocutory injunctive relief. In the normal circumstances, I would readily answer in the affirmative for indeed justice would demand it, given the manner in which the First, Second, Third Respondents have conducted themselves in apparent breach of licensing procedures under their enabling Act and Regulations.

Exhaustion of Administrative Avenues

20. However, there is a preliminary hurdle that the Applicants ought to have jumped before coming to this Court. And that is the exhaustion of all administrative avenues under the Fisheries Management Act and Regulations. The Fisheries Management Act, Section 44 provides for a process of appeal against refusal by the NFA Board to grant or issue a licence to the Minister for Fisheries, who shall appoint a License Appeal Committee which shall consider an appeal and make a decision. The decision shall then be referred to the Minister who shall consider whether the appeal shall be accepted or rejected. The Minister’s decision is final. Section 44 provides:
    
    44. APPEAL.

(1) A person whose application for a license has been refused by the Board may appeal to the Minister.

(2) An appeal under this section shall be made in writing within 30 days of the date of refusal of the application.

(3) In the exercise of his power to determine an appeal, the Minister shall convene a meeting of the Licence Appeals Committee.

(4) The Licence Appeals Committee shall comprise a Magistrate at Grade 5 level, the Departmental Head of the Department responsible for transport matters and the Departmental Head of the Department responsible for provincial affairs matters or their nominees.

(5) The Licence Appeals Committee shall receive a status report of the appeal from the Executive Director, and shall consider the appeal, with the view to arriving at a decision on the appeal.

(6) A decision of the Licence Appeals Committee shall be presented to the Minister for his consideration and the Minister shall thereafter make a decision as to whether the appeal be accepted or rejected.

(7) The decision of the Minister under Subsection (6) is final.

(8) The Managing Director shall give effect to the decision of the Minister.

20. It is clear that the Applicants in the instant case did not avail themselves fully to the administrative procedures and avenues available to them under the Fisheries Management Act, and have instead, out of desperation as I have alluded to earlier on, more than anything else, ran directly to the Court. They cannot do that, for unjust as it may seem to deny them injunctive relief, they must exhaust the administrative avenues available to them. That is trite law.

21. For this reason alone, the Applicants’ motion must be denied. They must appeal to the Minister within 30 days. The issues raised herein can be adequately and competently considered by the Licensing Appeals Committee, which, as we have seen, comprises of completely independent and uninterested members.

Concluding Remarks

21. Having said that, the manner and time frame in which the licensing process in respect of the Applicant’s applications for renewal – and other applications generally for that matter – cannot pass without comment. The NFA Board sat and deliberated on the Applicants’ applications on 05^th July 2018. It made a decision but did not formally inform the Applicants. The Applicants did not know about the Board’s decision until they sighted extracts of Summaries of TACs and Approved Licencees upon which they raised objections to the Board. The Board did reconsider the application on 20^th July 2018 but re-affirmed their previous decision which as I have noted above was heavily biased and smacks of conflict of interest and irrelevant considerations. Even then, the Board and NFA did not formally advise the Applicants until the 24^th July 2018, a mere 5 days prior to the opening of the 2018 BDM fishing session, thus leaving no time whatsoever for the Applicants to lodge Appeals to the Minister.
    
22. It would indeed appear to any reasonable observer, as submitted by Mr. Alberic, that matters were orchestrated to corruptly frustrate and deny the Applicants fair and unbiased consideration of their respective License renewal applications.
    

24. The NFA Board need not be told that the licensing process must be concluded well in advance of the opening of the fishing season so that persons who are aggrieved by decisions of the Board are accorded a real opportunity to challenge its decisions according to the procedures set out in the Fisheries Management Act. That is common sense, and it is hoped that in the future the licensing process, at least for the BDM fishery, given the restrictive nature of the harvesting season, is concluded well in advance of the opening of each fishing season, so that aggrieved applicants can avail themselves to appeal procedures available to them under the Act, and not scramble around at the last minute, as was the case here.

Orders

25. For the foregoing reasons I refuse the motion to grant the injunctive relief sought. The Applicants shall bear their own costs.

Orders accordingly.
_______________________________________________________
Alberic Lawyers: Lawyers for the Applicants