N8879
PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]
OS (JR) NO. 178 OF 2020 (IECMS)

BETWEEN:
AUS-PNG RESEARCH & RESEARCH IMPEX LIMITED
Plaintiff/Applicant

AND:
LOI BAKANI
First Contemnor

AND:
BANK OF PAPUA NEW GUINEA
Second Contemnor

Waigani: Miviri J
2021: 1st June

PRACTICE & PROCEDURE – Originating Summons – Notice of Motion – Statement of Charge – Affidavit in support – Contempt of Court – Application for – Order 12 Rule 7 (2) Stay of Proceedings until Payment Costs outstanding – Alternatively Frivolous Vexatious Proceedings – Dismissal of Order 12 Rule 40 – balance discharged – Motion granted – Proceedings dismissed – Cost follow event.

Cases Cited:

Vaki v Baki [2014] PGNC 21; N5612 
Kaputin, The State v [1979] PNGLR 544 
Bishop Brothers Engineering Pty Ltd v Ross Bishop [1989] PGNC 2; N690 
Yap v Tin Siew Tan, B & T Engineering Pty Ltd, Robert L Wong, William Baptiste and David F Tau [1987] PNGLR 227 
Rooney (No 2), Public Prosecutor v [1979] PNGLR 448
Luga v Sikani, Commissioner of Correctional Services (No 2) [2002] PGNC 60; N2286
Telikom PNG Limited v Independent Consumer and competition commission & Digicel (PNG) Limited [2008] PGSC 5; SC 906 
Takori v Yagari [2007] PGSC 48; SC 905

Counsel:

J. Napu, for Plaintiff/Applicant
I. Molloy & B. Pora, for Contemnors

					RULING 
 16th June, 2021
1.	MIVIRI, J: This is the ruling on the First and Second Contemnors two motions for dismissal of the application for contempt against both contemnors.
  
2.	The alleged contemnors have been served the allegation of contempt per the affidavits of service of Pastor Ben Kwalimu sworn of the 04th May 2021 filed the 06th May 2021, affidavit in support of Andrew Tamanabae of the same date and filed same, affidavit of Pastor Hane Mathew also of the same date and time filed, and of Reginald Melis of the 30th April 2021 and filed 03rd May 2021. Which is confirmation because today the contemnor Loi Bakani Governor of the Bank has attended in person and also as representative of the Bank of Papua New Guinea the second alleged contemnor in this proceeding in person with counsel. He has sat beside counsel despite application made for him to take the dock.

3.	There is no issue as to where the alleged contemnor sits here counsel has asked that his client be next to him so as to give instructions. This is in order in view of the strict and grave consequences befalling contempt if sustained. For now, the formal charges have not been put against the alleged contemnors that is the formal contempt proceedings has not been started, this is in respect of the two preliminary motions that are moved by the defendants, hence this ruling.

4.	But for all it is, contempt of court is a very serious matter with grave consequences against whom it is sought: Vaki v Baki [2014] PGNC 21; N5612 (13 June 2014). There the Commissioner of Police Toami Kulunga was found guilty of contempt of Court in that orders of the court to reinstate Geoffrey Vaki to the position of unattached Assistant Commissioner of Police was not complied with. Further there was no determination of the Disciplinary process against the allegation of disciplinary conduct against him by a Disciplinary officer higher in rank to him, which determination was not published and made public. Further there was no advertisement of the position of Deputy Commissioner of Police, with invitations to all including Geoffrey Vaki if he so wished to apply, and for consideration and a decision of it confirmed appointment made and published settling occupant to that chair. The court found him guilty of three counts of Contempt of Court with each drawing 7 years imprisonment each.

5.	There also the court described that contempt was both civil and criminal the former involved non-compliance of court order which was continuing until complied. That appears to be the case here against the alleged contemnors. In the case of the latter, it is analogous to criminal conduct and draw as in the above imprisonment or a lessor penalty of a fine. In my view it is therefore a very grave matter to allege either as civil or criminal contempt, and for that the defendants are in contempt, or their conduct amounts to contempt. In Kaputin, The State v [1979] PGNC 23; [1979] PNGLR 544 (10 October 1979) he was ordered to lodge company returns for the Company for which he was a director and the secretary, the New Guinea Development Corporation Limited, which failed to lodge with the Registrar of Companies its annual return for 1977 and other documents required by the Companies Act 1963, to be lodged therewith. On 30th March 1978, an order was made by the National Court requiring the accused to make good the default within three months. The returns were not lodged as ordered and the accused was charged with the offence of disobeying a lawful order made by a court under s. 209 of the Criminal Code. The returns were finally lodged some fourteen months after the order was made.

6.	He was convicted and sentenced to imprisonment for 10 weeks. The court reasoned because it was by statute, the Criminal Code Act the interpretation was strict. That the term disobeys was analogous to failed to obey as used in the Code. And the standard of proof was beyond all reasonable doubt. And whether or not there was lawful excuse for the conduct was according to the various exculpations provided in Ch. V of the Criminal Code and could extend to excuses which are provided or arise under some other statute or provision of the law. The evidence did not provide lawful excuses on the civil balance and so the conviction was affirmed.

7.	Here the allegation arises from supposedly court orders issued by this Court which is not the same as the criminal conduct set out by the Criminal Code set out above. It is therefore important to gloss the order that was made. That order was very clear and unambiguous and served on the alleged contemnors. Obedience to the order is important as there lies contempt of court: Bishop Brothers Engineering Pty Ltd v Ross Bishop [1989] PGNC 2; N690 (17 March 1989). And this remains until the discharge of that order Yap v Tin Siew Tan, B & T Engineering Pty Ltd, Robert L Wong, William Baptiste and David F Tau [1987] PGSC 21; [1987] PNGLR 227 (3 July 1987). And this is clear when a letter is written by the Minister of Justice to the Chief Justice scandalizing the Court by that letter, Rooney (No 2), Public Prosecutor v [1979] PGSC 23; [1979] PNGLR 448 (11 September 1979). In the backdrop of all these, it is necessary to examine the facts pertinent to this allegation of contempt against the defendants.

8.	The plaintiff alleges that the defendants in not issuing Gold exporting Licences for the years 2010, 2011, 2012, 2014, 2015, and 2016 have breached the Court Order made on the 02nd February 2007 in proceedings described as MP No. 937 of 2006 (MP937). And claims that the defendants are liable for damages which are not available in contempt proceedings and that is clear by the authorities set out above: Luga v Sikani, Commissioner of Correctional Services (No 2) [2002] PGNC 60; N2286 (4 October 2002) is an example to settle with all set out above. So, damages would not be appropriate, nor would it emanate given. What then is the order that gives the allegation that the defendants breached and are in contempt for so doing?

9.	Annexure “A” of the affidavit of Bethsheba Pora sets out that order as follows, “MP No. 937 of 2006. Between Wilson Kamit Informant and Aus PNG Research & Resource Impex Limited defendant. 

The Court Orders that: (1)	The Information filed on 11th December 2006 is quashed and the proceedings in MP No. 937 of 2006 are dismissed;

(2)	The Central Bank shall forthwith grant a new authority to the defendant to trade in and export gold in the same or equivalent form and subject to the same or equivalent conditions as for the Authority granted to the Defendant in February 2006, such new Authority to be effective from 1st January 2007.
(3)	The Central Bank shall not revoke or vary any conditions of the new Authority without the leave of the National Court, which, if sought, shall be sought by Originating Summons supported by Affidavit;
(4)	The informant shall pay the defendant’s costs to be taxed if not agreed.
(5)	Time be abridged to the time of Settlement by the Registrar which shall take place forthwith.
It is ordered 2nd February 2007 entered 06th February 2007 signed by the Ian Augerea the Registrar of the court.

10.	Of course, this Authority draws from the Act of Parliament that grants which is set out in the affidavit of Loi Bakani sworn of the 26th May 2021, filed the 27th May 2021. The relevant section that is set out at page 2 of that affidavit is as follows:

 “Section 80 of the Central Banking Act 2000 provides to the effect, amongst other things, that, the regulations may be made which provide for or relate to:

		(a)	the control of gold;
(b)	the appointment of authorized dealers in gold and their powers, rights, duties and responsibilities;
(c)	the buying, selling, borrowing, lending or exchange of gold;
(d)	any dealing or transaction having the effect of a purchase, sale, borrowing, loan or exchange of gold;
(e)	the taking or sending gold out of the Country of Papua New Guinea
Regulations under the Act are contained in the Central Bank (Foreign Exchange and Gold) Regulations 2000 (the Regulations).
The Regulations of particular relevance to this matter is Regulation 24 which makes it an offence for a person, without the consent in writing of the Central Bank, to send gold out of Papua New Guinea.
The Central Bank authorizes persons to send gold out of the country by what is known as a Gold Export Licence (GEL). Such Licence is issued on a calendar year basis or part thereof and consequently if a person wishes to continue to export gold after the licence expires at the end of the year, that person must make application and be granted a new licence for the following year,
Each GEL is subject to terms and conditions which must be complied with.
Gold has a listed price and is a very tradeable commodity. Its transfers out of the country is restricted as is the transfer of currency out of the Country and by the same regulation.
In this proceeding the Plaintiff alleges to the effect that the Central Bank failed to comply with the terms of a Court Order made on 2nd February 2007 (the 2007 Court Order) and as consequence both the Central Bank and I are in contempt of Court (“Contempt charges.”)
Compliance with the Order of 2nd February 2007
The 2006 GEL granted to the Plaintiff had been for a period of 12 months expiring on the 31st December 2006. Annexure “LB3”is that GEL dated 07th February 2006.
And in compliance with the 2007 Court Order of 2nd February 2007, on 09th February 2007 a GEL was issued to the Plaintiff for 2007. By letter dated 13th February 2007 the Plaintiff acknowledged acceptance of the terms and conditions of the 2007 Gel and by letter dated 14th February 2007 the Plaintiff was advised it could commence exporting gold. And annexure “LB4”is a copy of GEL. This remained in force to the 31st December 2007 and during the course of the year the Bank did not as ordered by the Court, revoke or vary any of the conditions of the 2007 GEL.
The 2008 GEL
A GEL was issued to the plaintiff in 2008 dated the 29th January 2008. The terms and conditions applicable to this GEL were accepted by the Plaintiff by letter dated 25th February 2008 (incorrectly dated 2007). And that is annexure “LB5” of the affidavit.
The 2009 GEL
A GEL was issued to the Plaintiff for 2009 dated the 14th April 2009. The terms and conditions applicable to this GEL were accepted by the Plaintiff by letter dated 17th April 2009. And that is annexure “LB6.”
Gold exported under a GEL is closely monitored and recorded. The Policy of the Central Bank is to review and reconsider the issue of a licence in a subsequent year where in the preceding year, the licence holder failed to export any gold under the GEL for the preceding year.
It is not uncommon for a licence holder to be asked to show cause why a licence should issue when in the preceding year the licence holder has not exported any gold under the GEL, the intention being that a GEL will only issue to those who will export Gold under the GEL.”

11.	What this evidence establishes is that the GEL is issued for a duration of a year with or without conditions as stated by the Bank of Papua New Guinea as the administrative agency concerned with implementation enforcement maintenance of the Central Banking Act 2000 together with the Central Bank (Foreign Exchange and Gold) Regulations 2000 (the Regulations). And as such it will institute on the observance and adherence to conditions before issuing notably such as, “The Central Bank will not issue the Licence in 2010 should the Plaintiff fail to make any precious Metals export during the licence period.”  And “The Licence is to be strictly used “only” by APRRIL (the plaintiff) to export its precious Metals and must not be “lent” to or used by a third party to export these metals”.

12.	And this is clear for 2011 and 2012 in response to the Plaintiff’s letter dated the 23rd July 2011 application for a GEL, the Bank by letter dated 29th August 2011 requested additional information and that was not forthcoming hence no licence emanating. Both are annexure “LB10.” The plaintiff through Ravungs & Associates, Business & Taxation Advisors) responded requesting for a GEL for 2012. Here the Plaintiff was required to export gold for and on behalf of another company and by letter dated 21st June 2012 the Plaintiff was advised to the effect this was not permitted and that company, if it wished to export gold, should apply for its own GEL. Consequently, no GEL was issued the plaintiff for 2012. These letters are annexure “LB11” of the 25th April 2012 and 21st June 2012.

13.	They show out the consistency in the actions of the bank when the plaintiff made an application for a GEL for 2014. And this is in the response of the bank annexure “LB12”, where the bank declined the application reasoning that the terms and conditions of a previous GEL were not met. And when queried as to what these grounds were the bank answered, (a)	failing to conduct any exports when holding a licence in 2008 and 2009; (b) breaching condition 3 of the 2006 GEL by exporting gold on behalf of a third party; (c) breaching the regulations by entering into a JV Partnership arrangement with a SIP (a non-resident) through its related company, Best Way Projects Pty Ltd without the approval of the Central Bank; and (d) applying in 2012 and 2013 to export gold on behalf of a third party contrary to the Regulations.”

14.	In the analysis with the order 1 of the 2nd of February 2007, it is clear the authority issued for February 2006 lapses and that a new Authority to be effective from 1st January 2007. From the evidence of this period set out above in the affidavit of Loi Bakani, the Governor of the bank of Papua New Guinea, there is no breach of that order because a GEL is issued to the Plaintiff for that year 2007. Had there being no issue of the GEL for that year 2007, the first and second contemnors would have breached the order 1. As it is there is no breach from all the material set out above of order one. It is the same for order two, because there is no evidence of a revocation or varying of any of the conditions of the new Authority that is of 2007 without the leave of the National Court. It is clear there is compliance of that order of this court by the defendants, first and second contemnors. Hence to be contempt there ought to be noncompliance, or disobedience of these orders by the first and second contemnors. And this is clear by the authorities set out above.

15.	It means for all intent and purposes the action fails to disclose a reasonable cause of action within the terms of order 12 rule 40, “(1)	Where in any proceedings, it appears to the Court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings- 
(a)	no reasonable cause of action is disclosed; or
(b)	the proceedings are frivolous or vexatious; or
(c)	the proceedings are an abuse of the process of the Court,
The Court may order that the proceedings be stayed or dismissed generally or in relation to any claim for relief in the proceedings.

16.	Put another way the action is frivolous and vexatious adopting Lerro v Stagg [2006] PGNC 2; N3050 (20 April 2006), it "is frivolous and vexatious on the basis that the claim cannot possibly succeed, it amounts to harassment of the Defendants/Applicants and as a result the Defendant/Applicants are put to the trouble and expense of defending a claim which has no legal basis at all. The Defendants are having difficulty in identifying the real cause of action, whether it be breach of contract, breach of duty or whether the Plaintiff is claiming for quantum meruit. There is a real problem in identifying the cause of action."

17.	Essentially that is the case for the defendants first and second contemnors, here in the light of the discussion set out above with the backdrop of the evidence particularized, the action cannot succeed against them both. Because essentially, they both complied, they issued a new authority as ordered by the Court in the issue of 2007 GEL. Here it is more of harassment by the plaintiffs than a real cause of action against. And further here three other proceedings, WS 61 of 2016, OS 841 of 2018 and HR 17 of 2020 were filed by the Plaintiff. Effectively the same or substantially the same cause of action was founded because in WS 61 of 2016 the same cause of action was pursued against Mr Bakani, the bank and the State claiming damages for failing to issue a GEL for 2014. The proceedings were dismissed and the plaintiff was ordered to pay costs taxed and allowed of K 77, 026.40. Which remains outstanding and unpaid.

18.	And in OS 841 of 2016 the plaintiff sued Mr. Bakani and Ben Popoitai the Deputy Governor of the Bank making the same allegation as now contended. It was dismissed on the 08th November 2018 because there was no basis for the application for contempt. It was a frivolous and vexatious proceedings and the plaintiff was ordered to pay the costs of the defendants on a Solicitor Client basis after an application was made by the defendants on the 08th November 2018. From this proceeding the bill of costs was K135, 834.20 after dismissal. Anticipating taxation, it could come down to about K 70, 000.00 yet again against the Plaintiff to be paid.

19.	Hence that leads to the first motion is of the 18th December 2020, seeking;

(a)	Pursuant to Order 12 Rule 7 (2) of the National Court Rules (NCR), to stay the proceeding until the plaintiff pays to the defendants the sum of K 77, 026.40 being costs payable by the plaintiff in WS No. 61 of 2016 on the dismissal of that proceedings on 15th September 2018 and that such costs be paid within 30 days;

(b)	Secondly pursuant to Order 12 Rule 7 (2) of the NCR to stay the proceedings until the plaintiff pays the defendants the sum of K70, 000.00 for costs which will be payable by the Plaintiff in proceedings OS 841 of 2016 on the dismissal of that proceedings on 08th November 2019 and that such costs be paid within 30 days.

(c)	Thirdly, alternatively the proceedings be dismissed for being frivolous and vexatious and an abuse of process of Court pursuant to Order 12 Rule 40 of the NCR. 

20.	Order 12 Rule 7 (2) is in the following terms, (2)	Where	(a) the Court makes an order for the dismissal of proceedings so far as concerns the whole or any part of any claim for relief by any party; and	(b)	the Court orders that party to pay any costs; and	(c)	before payment of the Costs, that party brings against a party to whom the costs are payable further proceedings on the same or substantially the same cause of action as that on which that claim for relief was founded,	the Court may stay the further proceedings until those costs are paid.”

21.	Effectively because these are court orders which must be complied with. They cannot be left at the pleasure of the party against, in this case the plaintiff. Because until discharge of those orders he is not free from them. In the same way as he has levelled here it is upon him to show that respect due. That without discharge he cannot go and lodge yet a new proceeding without. The facts which are observed above relevantly draw that the discretion of the court be exercised to stay further proceedings here against the Plaintiff until costs earlier secured are paid by them. The same cause of action is brought from which costs orders made are outstanding yet to be paid by the plaintiff. Here it is clear that this is action that will not sustain against the Contemnors. And therefore, it is balance discharged in favour of the applicant contemnors that by this rule that any action stays until the payment of these costs outstanding. Accordingly, those orders as applied are granted in those terms in favour of the contemnors against the plaintiff. He will not institute any action until both costs orders are discharged in full and entry made.

22.	The second motion is of the 27th May 2021 stems from Order 12 Rule 1 of the rules read with section 155 (4) of the Constitution, basically seeking to strike out the “amended” documents as an abuse. That there is simply no authority to file and serve an amended originating summons or statement of charge. And that the amendments of both were not accorded within the rules under Order 8 Rule 50 of the NCR. And could not stand to dispense as they contended.

23.	To advance the second motion the plaintiff relies upon the affidavits of Bathsheba Pora filed of the 26th May 2021 together with one by Loi Bakani, also filed of that same date. She is a lawyer employed with Allens lawyers for the first and second contemnors. She deposes that no leave was granted the plaintiff to amend and to file the amended originating summons and the amended Statement of Charge of the 03rd of March 2021 with the Notice of Motion of the 20th April 2021. And there is no evidence after search to this effect in the court files pertaining. Annexure “A” is copy of the index to that court file clearly not evidencing. 

24.	This is also the evidence of Loi Bakani that leave has not being granted the plaintiff to file an amended originating summons an amended statement of charge of the 03rd March 2021 and the subject notice of motion of the 20th April 2021. He contends further that he was not accorded opportunity to voice in court objections against the amendments. Nor of particulars as to how he was to have disobeyed the court order of the 02nd February 2007, and therefore amounting to contempt as alleged. By letter dated 25th May 2021 he specifically contended by his lawyers as to charge number 1, particularly as to when he allegedly disobeyed the court order dated the 02nd February 2007 relevantly the dates and times relied. What facts constituted his disobedience of that order dated 02nd February 2007.

25.	Similarly, when did the second contemnor allegedly disobey that order of the 02nd February 2007 in particular the date or dates relied. And how did it allegedly disobey that order stating the facts, matters and circumstances relied in the allegation. And who on its behalf as a corporate person allegedly disobeyed that order. The letter went onto ask for the particulars by close of business Wednesday 26th May 2021.

26.	It means for all intent and purposes it is not a new matter de novo and amounts to res judicata as in Telikom PNG Limited v Independent Consumer and competition commission & Digicel (PNG) Limited [2008] PGSC 5; SC 906 (28 March 2008). The concept of res judicata was discussed and that has seen the light there. It has been determined by a court of competent jurisdiction on its own merits. And the same is pursued and repeated here because the plaintiff has come now after the decision of this court. That amounts to abuse of the process and the court will protect its process from the same. A court of competent jurisdiction has decided which must be protected. It has gone to the Supreme Court and will not be visited here again.

27.	The other side of the balance is that dismissal of the entire proceedings denotes denying the litigant from the judgement seat. And it should never be the case that, “our Judicial system should never permit a plaintiff or a defendant to be driven from the Judgement seat in a summary way, without a Court having considered his right to be heard. A party has a right to have his case heard as guaranteed by the Constitution and the laws of the land. The Rules are designed to enhance those rights and to ensure the prompt and fair disposal of matters coming before the court. That right cannot be lightly set aside.” Here I have closely and carefully weighed out the facts in particular, and considered the Supreme Court in Takori v Yagari [2007] PGSC 48; SC 905 (28th February 2007), and it is my considered view that the evidence does not mount up to the required balance to call that leave is due as pleaded.

28.	The formal orders of the Court are:

(i)	The Motions of the first and Second Contemnors are granted as applied,
(ii)	The proceedings are dismissed in its entirety as frivolous and vexatious and an abuse of process pursuant of order 12 rule 40.
(iii)	Any further action is Stayed pursuant to Order 12 Rule 7 (2) of the NCR that Costs outstanding and ordered of  K 77, 026.40 being costs payable by the plaintiff in WS No. 61 of 2016 on the dismissal of that proceedings on 15th September 2018 and that such costs be paid within 30 days and orders entered evidencing;
(iv)	Any further action is stayed pending payment of K 70, 000.00 for costs which will be payable by the Plaintiff in proceedings OS 841 of 2016 on the dismissal of that proceedings on 08th November 2019 and that such costs be paid within 30 days and orders entered evidencing.
Orders Accordingly.
__________________________________________________________________
Napu & Company Lawyers: 	Lawyer for the Plaintiff		
Allens:                                         Lawyer for First Defendants