N8359

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

HR(OS). 14 OF 2020

BETWEEN:
DANIEL ALOI
Plaintiff

AND:
JOE AKA AS MANAGING DIRECTOR OF MABUSO DEVELOPMENT LIMITED
First Defendant

AND:
MABUSO DEVELOPMENT LIMITED
Second Defendant

Madang: Narokobi J
2020: 12th & 16th June

INJUNCTIONS – injunction – application for injunction to stop eviction from property – relevant considerations to exercise of court’s discretion – equitable principles.
The plaintiff, a former Provincial Administrator of the Madang Provincial Government resides on a property, where he has been given notice to evict by the Defendants and after obtaining interim ex parte orders seeks to have the orders extended pending hearing and determination of the substantive proceedings or until further orders.
Held:
(1) When dealing with extension of interim orders made ex parte, the considerations during inter partes hearing are the same as when the order was issued ex parte, Ekepa v Gaupe [2004] PNGLR 22, distinguished.
(2) When dealing with applications for interim injunctions the court should consider four main issues. First, are there serious questions to be tried or does the plaintiff have an arguable case? Secondly, does the balance of convenience favour granting the injunction? Thirdly, whether damages would be an adequate remedy if the injunctive order is not granted? Fourthly, whether an undertaking as to damages has been given.
(3) In the circumstances, all of the considerations favoured the extension of the injunction sought until further orders or determination of the proceedings.
(4) The application for an interim injunction granted ex parte was accordingly extended until further orders or determination of the substantive proceedings.
Cases Cited:

The following cases are cited in the judgment:

Ekepa v Gaupe [2004] PNGLR 22
AGK Pacific (NG) Ltd v William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062
Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers and Seaman's Union and Others (1982) N393
Ewasse Landowners Association Incorporated v Hargy Oil Palms Ltd (N2878)
Gobe Hongu Ltd v National Executive Council (1999) N1920
Mainland Holdings Limited & Others -v- Paul Robert Stobbs & Others (2003) N2522
Robinson v National Airlines Commission [1983] PNGLR 276

Counsel:
Mr. B. Wak, for the Plaintiff
Mr. J. Lai, for the Defendants

RULING
16th June, 2020
1.      NAROKOBI J: The Plaintiff has filed an Originating Summons on 4 June 2020 asking the court to declare that the Second Defendant is not the registered proprietor of the property described as Section 04, Allotment 25, Madang, Madang Province (“the Property”). This is the Property that the Plaintiff is currently residing on and seeks interim relief pending the resolution of the substantive proceedings.

A	BACKGROUND 

2.      In the Plaintiffs Originating Summons filed on 4 June 2020, he seeks orders that the Defendants be prevented from evicting him for reasons that the Second Defendant is not the registered proprietor of the Property the subject of the proceedings, that the eviction would be contrary to an existing court order issued in a separate proceeding and that in the circumstances it would be harsh and oppressive contrary to Section 41 of the Constitution. The Originating Summons also seeks injunctive relief preventing his eviction from the Property.

3.      These proceedings arose out of two eviction notices issued to the Plaintiff in a letter dated 6 April 2020, giving him 60 days to vacate the property and a second notice issued in a letter dated 26 May 2020, giving the Plaintiff 14 days to vacate. Both letters are signed firstly by a “Joe R Aka” and then by a “Mr Joseph R Aka,” whom I presume is the same person and is the First Defendant in the current proceedings. The two notices do not state what Section and Allotment of the property the notice relates to. 

4.      The Plaintiff has also filed a Notice of Motion on 4 June 2020 seeking interim orders to restrain the Defendants from evicting him from the Property.

5.    Initially the motion was heard ex parte as an urgent matter on 4 June 2020, and interim orders were issued and then adjourned to 10June 2020 for inter partes hearing. The orders of 4 June 2020 were then further extended to 12 June 2020 and argued inter partes at that time.

6.      I reserved my decision to today for the court to rule on the issue of whether to extend the interim orders, and further extended the orders to today.

B	PARTIES CONTENTION – PLAINTIFF   

7.      This is a case where neither the Plaintiff nor the Defendants have a legal interest in the Property, and the management of the registered proprietor is the subject of legal wrangling. 

1)	Plaintiff’s Evidence and Submissions 

8.      The Plaintiff relies on the following affidavits to support his case:

•	Affidavit of Daniel Aloi filed on 4 June 2020;
•	Further Affidavit of Daniel Aloi filed on 4 June 2020; and 
•	Affidavit in Response of Daniel Aloi filed on 10 June 2020. 

9.      Essentially what the Plaintiff is saying in these affidavits are that the registered proprietor of Section 1 Allotment 25 is Ramu Development Foundation Ltd (RDFL).

10.      The Plaintiff states that the Second Defendant is not the registered proprietor and therefore it nor its servants and or agents cannot evict him from the property.

11.      The Plaintiff further says that he has a lease agreement with RDFL and therefore only RDFL can terminate the lease agreement. He says further that he has been paying rent to RDFL.The Plaintiff cannot locate a copy of the lease agreement setting out the terms of the tenancy. The rental payments were deducted from his fortnightly salaries.

12.      The Plaintiff refers to proceedings styled as OS 954 of 2017 and says that court orders issued in that case on 2 March 2018, prevents the Madang Provincial Government from removing him as a Director of RDFL. That Court order reinstated the previous directors of RDFL, which included the Plaintiff, because the court found that they were removed contrary to the Companies Act 1997.

13.      The Plaintiff urges the Court to apply the case of Ekepa v Gaupe [2004] PNGLR 22 to the facts of the present case, arguing that the considerations outlined in that case have been met in the present case. That case outlines six (6) principles which the court ought to consider if it is asked to set aside a previously issued injunction.

C	PARTIES CONTENTION – DEFENDANTS 

2)	Defendants Evidence and Submissions

14.      The Defendants opposes the Plaintiff’s application and relies on the affidavit of Joseph Aka filed on 9 June 2020.

15.      The main opposition to the extension of the injunction outlined in Joseph Aka’s affidavit is that the Madang Provincial Government is the sole shareholder of RDFL and they have now decided to incorporate the Second Defendant as its business entity and all assets owned by RDFL will be transferred to the Second Defendant. 

16.      Joseph Aka says that the property described as Section 4, Allotment 25, Madang, Madang Province, is the adjoining property, a vacant piece of land. The actual property the Plaintiff resides on is Section 4, Allotment 13, Madang, Madang Province.

17.      Mr Aka further says that he is not aware of any rental payments being made by the Plaintiff and that the Plaintiff has been living illegally on the property for the last five (5) years and has not been paying rent to either RDFL or the Second Defendant. According to Mr Aka, the Plaintiff has been illegally squatting on the Property.

18.      In its submission, the Defendants says that it has an equitable interest in the Property and the quadruple requirements for the grant of the injunctionhave not been met, that is the requirements of arguable case, balance of convenience, adequacy of damages and undertaking as to damages. For these reasons, it submits that the injunctions must be discharged.

D	FINDINGS OF FACTS

19.      After considering all the evidentiary materials filed by the parties, I make the following findings of facts for purposes of determining the question before me, that is, whether the interim injunction should be extended. I remind myself that the finding is preliminary as the proceeding is at an interlocutory stage and the facts could change after further material is brought to the attention of the court or if the existing evidentiary material is subject to more robust scrutiny during trial.

20.     The first finding I make is that the current registered proprietor of Section 4, Allotment 13 and 25, Madang, Madang Province is RDFL.Upon closer scrutiny of the State Lease, one will notice that it refers to Section 4, Allotment 13, and then an addition is made immediately underneath the figure “13” the words and numbers “and 25”. On the last page of the State Lease, there is a map of two allotments, 25 and 13 adjoining Kalibobo Road. At present it is arguable as to whether the Plaintiff resides at Allotment 13 or 25. On the face of it, it seems to me, that RDFL is the registered proprietor of both Allotment 13 and 25. It is likely that this will be an issue at trial.

21.      The second finding I make is that there is in existence a court order in OS 954 of 2017 issued on 2 March 2018, which restrains the Governor of Madang and the Madang Provincial Government from changing the Board of Directors of RDFL. The Plaintiff is an existing director of RDFL.

22.      The third finding I make is that the Defendants were given the mandate by the sole shareholder of RDFL, that is the Madang Provincial Government (through the Provincial Executive Council (PEC)) to transfer RDFL’s assets to the Second Defendant, which no doubt includes Section 4, Allotment 13 and 25, Madang, Madang Province. This was by way of a resolution from the Provincial Executive Council of the Madang Provincial Government on 24 December 2019, Meeting No 7 of 2019, Decision No 133 of 2019. The critical factor is that they have not implemented that decision yet by changing the proprietor of Section 4, Allotment 13 and 25, Madang, Madang Province at the Lands Department from RDFL to the Second Defendant.

23.     Although Mr Lai of Counsel for the Defendants pointed out to me that the Plaintiff actually resides on Section 4, Allotment 13, and not Allotment 25, I have simply considered this as a serious factual issue and make no determination of this disputed fact until all the evidence have been tendered.

E	ISSUE

24.      I consider the issue to be whether the injunction granted ex parte on 4 June 2020 should be extended?

F	THE LAW

25.      As I see it, the law in relation to varying existing court orders or setting them aside, is not relevant here. The case of Ekepa v Gaupe [2004] PNGLR 22, which relied heavily on Mainland Holdings Limited & Others -v- Paul Robert Stobbs & Others (2003) N2522 was in relation to injunctions granted inter partes, and then sought to be varied after a material change in the conditions which existed at the time of the grant of the injunction. With respect, parties have not argued that there has been a change in material conditions since the grant of the injunctions.

26.      The law on the grant of injunction is settled in this jurisdiction.

27.      The first point of law to observe is that an injunction is founded in equity and as such it is applied at the discretion of the courts (seeAGK Pacific (NG) Ltd -v- William Brad Anderson, Karson Construction (PNG) Ltd and Downer Construction (PNG) Ltd (2000) N2062, Injia J, (as he then was)).

28.      There are many cases which outline the following four principles which the court ought to address its mind to, before it issues an injunction:

1)	Whether there is a serious question to be tried (see Robinson v National Airlines Commission [1983] PNGLR 276);
2)	Where does the balance of convenience lie? (see Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers and Seaman's Union and Others (1982) N393;
3)	Will damages be an adequate remedy if the injunction is not granted (Employers Federation of Papua New Guinea v Papua New Guinea Waterside Workers and Seaman's Union and Others);
4)	Whether the applicant has given an Undertaking as to Damages (Gobe Hongu Ltd v National Executive Council (1999) N1920)]

29.      These are the four tests an applicant who wishes to apply to court for an injunction must satisfy.

G	APPLYING THE LAW TO THE FACTS

30.      To determine the issue I have identified, I must consider how the facts speak to each of the four considerations relevant to the grant of injunctions.

1)	Serious Question to be Tried

31.      I am reminded by what Andrew J said in Robinson v National Airlines Commission:

“What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success and that he has property or other interests which might be jeopardized if no interlocutory relief were granted.”

32.      I have taken serious note of the forceful submission of Mr Lai, that there is no lease agreement in place, and that Madang Provincial Government is the sole shareholder of both RDFL and the Second Defendant and wants to take control of these entities through the PEC, but remind myself that my task is to determine whether there are serious issues to be tried, which the court will consider in detail during trial.

33.      The Defendants rely on Section 6 of the Summary Ejectment Act, but that provision is premised on the “owner” of the property making a complaint to the District Court. Here the issue is, who is the “owner”? Who should have the right to eject the Plaintiff?

34.      I have formed the view that there are serious questions to be considered at trial. These issues are, and they are not exhaustive or conclusive:

•	Whether the Defendants at presenthave a legal interest of the Property entitling them to issue the notice to vacate to the Plaintiff?
•	If they do not have a legal interest, do they still have an equitable interest in the Property based on the several PEC decisions, especially the one on 24 December 2019 which entitles them to issue the notice to vacate to the Plaintiff?
•	Even if the Defendants have a legal and or equitable interest, would the notice to vacate be contrary to the order of the court made on 2 March 2018 in OS 954 of 2017?
•	Even if the Defendant’s case fails, what interest does the Plaintiff have in the Property in the absence of a duly executed lease agreement?
•	The fifth issue is whether the property the subject of the proceedings is actually Section 4, Allotment 13 and not Section 4, Allotment 25 both of Madang, Madang Province?

35.      In my respectful view theseare serious questions of fact and law whichthe court must consider and determine.

36.      No doubt there will be other issues as well arising during the course of the proceedings.

2)	Where does the balance of convenience lie?

37.      In considering this question, I find myself asking similar questions Cannings J asked in Ewasse Landowners Association Incorporated v Hargy Oil Palms Ltd (N2878):

“It has always struck me that that is a rather curious form of words, meaningful probably only to lawyers. So I will try and put that time-honoured phrase into plain English. What is the best thing to do on an interim basis taking into account the conflicting interests? Where do the interests of justice lie? What will happen if an injunction is not granted? What will happen if an injunction is granted? Who will suffer the greatest inconvenience?”
38.      According to the evidence as it now stands, the Plaintiff currently resides on the Property and if he vacates the property, he faces a lot inconvenience as opposed to the Defendants.

39.      The additional complication is that there is legal wrangling over the management of RDFL. Whilst the Second Defendant has pointed out that there are changes to the directors of RDFL by its sole shareholder, the Madang Provincial Government, the court has been shown orders preventing the change in directors from taking place. This to me suggest that we should maintain the status quo until the court figures out what is going on.  

40.      For this reason, I find for the Plaintiff in this consideration.

3)	Will Damages Be an Adequate Remedy if the Injunction is Not Granted?

41.      Both the Plaintiff and the Defendants interests are tentative at this stage. Neither of them have a legal interest in this property. So it is not appropriate at this stage to allow the eviction to take place now when it is unclear as to how the Defendants themselves stand in relation to the proprietorship of the property.  For this reasonI do not think that damages is adequate in this instance. Consequently, I also find this consideration in favour of the Plaintiff.

4)	Undertaking as to Damages

42.      The Plaintiff has filed an Undertaking as to Damages, and it is not in issue. If the court discharges the injunction, the Plaintiff will have to vacate the property and pay any damages occasioned by their occupation of the property during the period of the injunction.

43.      I note that the Plaintiff is a former Administrator and a person of standing in the community and would fulfill his undertaking to the court in respect of any damages occasioned by the injunctive relief.

44.      My conclusion is therefore that this is a case for the issuance of injunctions.

45.      I agree with the Plaintiff that the best way forward now is to issue directions to expedite this matter, and after I issue the formal orders of the court I will hear Counsels on proposed directions for an expedited hearing. 

H	CONCLUSION

46.      In my consideration therefore of the facts and the law and the conclusions I have reached, I make the following orders:

1)	The interim orders of 4 June 2020, and subsequently extended on 10 June 2020 and 12 June 2020 is to continue until further orders of the National Court or determination of the substantive proceedings;
2)	Costs be costs in the cause; and
3)	Time for entry of these orders is abridged to the date of settlement which shall take place forthwith before the Registrar.

Bradley Wak Lawyers:	Lawyers for the Plaintiff
Thomas More Ilaisa Lawyers and Attorneys: Lawyers for the Second Defendant