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Eagle Supplies Ltd v Kanol [2024] PGNC 118; N10782 (2 May 2024)

N10782

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]


OS NO. 180 0F 2023


EAGLE SUPPLIES LIMITED
Plaintiff


V
TOM KANOL as agent of Western Highlands Provincial Government
First Defendant


WESTERN HIGHLANDS PROVINCIAL GOVERNMENT
Second Defendant


Mt. Hagen: Eliakim J
2023: 11th December
2024: 02nd May


PRACTICE AND PROCEDURE – Application for Interim Injunction and preservation of property - O.12 R.1 and O.14 R.10 (1) of the National Court Rules – National Court has inherent jurisdiction to protect the rule of law – No evidence of legal detention of assets - Application granted.


Cases Cited
Chief Collector of Taxes -v- Bougainville Copper Ltd (2007) SC853
Ewasse Landowners Association Incorporated v Hargy Oil Palms Ltd (2005) N2878
Paikel v Kaiwe Pty Ltd [1997] PNGLR 603
SCR No.2 of 1981 [1982] PNGLR 150


Counsel


Mr. H. Pora, for the Plaintiff/ Applicant
Mr. C. Kuira, for the First & Second Defendants


RULING


2nd May 2024

  1. ELIAKIM J: The applicant filed a motion seeking the return of the following properties which it claims were illegally seized from its property at Warakum, Mt Hagen, by the defendants with the assistance of the police, on 06 July 2023.
  2. In summary, the applicant seeks the following orders:

Agreed Facts


  1. The following vehicles are duly registered under the plaintiff company name, Eagle Supplies Limited:-
1.
Isuzu Tipper Dump Truck
BDB 651
2
Isuzu Tipper Dump Truck
BDB 619
3.
Isuzu Tipper Dump Truck
BDB 683
4.
Komatsu Excavator
LAT 145
5.
Komatsu Excavator
HAU 786
6.
Caterpillar Loader
HAU 786
7.
Water Drilling Equipment

  1. The defendants with the assistance of the police, forcefully removed the machineries from the plaintiff’s yard on or about 06 July 2023.
  2. No Search Warrant nor any Court Order for Seizure and Detention from any court, was ever obtained against the Plaintiff nor any of its properties.
  3. Counsel Kuira for the defendants concedes that his clients have undertaken an administrative investigation only on shareholding of the Western Highlands Development Corporation, who is not a party to this proceeding.
  4. Further, that the defendants have never pursued any criminal investigations nor any criminal charges against the plaintiff company or its directors.

Issues for Determination


  1. For purposes of the application before me, there are two main issues for this court’s determination:-
    1. Does the First & Second Defendants have any legal authority to continue detention of the Plaintiff’s machineries which were seized on 6th July 2023 without a Search Warrant or a lawful order of a court?
    2. Has the Plaintiff/Applicant satisfied the principles required for the grant of an interim injunction?
  2. I will consider the application under each of these two issues separately.
    1. Does the First & Second Defendants have any legal authority to continue detention of the Plaintiff’s machineries which were seized without a Search Warrant or a lawful order of a court, on 06 July 2023?
  3. Order 12 Rule 1 and Order 14 Rule 10 of the National Court Rules provides for general relief and preservation of property, respectively.
  4. Section 155(4) of the Constitution confers jurisdiction on the court to issue facilitative orders in aid of enforcement of a primary right conferred by law, whether such right be conferred by statute or subordinate legislation enacted under the enabling statute. (SCR No.2 of 1981 [1982] PNGLR 150).
  5. Order 14 of the National Court Rules deals with miscellaneous powers of this Court. Rule 10 states:-

“(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."


  1. The applicant relies on the definition of a registered owner of a vehicle under the Motor Traffic Act, as adopted in the case of Paikel v Kaiwe Pty Ltd [1997] PNGLR 603, in which his Honor Injia J (as he then was) held that “A motor vehicle is a special good, the conditions for ownership of which are prescribed by statute. The Motor Traffic Act Ch. 243 and the Regulations, and form 9, provide for a system of registration of motor vehicles. The "owner" of a motor vehicle means a "registered owner" whose name is prescribed in the current Certificate of Registration and none other.”
  2. The applicant’s counsel Mr. Pora further submitted that there was never any evidence then and even now, of a search warrant issued under the Search Act nor a formal order of a court to search and confiscate the machineries, duly registered under the applicant’s name. Again, I am reminded that these facts are not in dispute.
  3. It is therefore the applicant’s submission that the defendants’ actions on 06 July 2023 breaches the Search Act as well as section 44 of the Constitution which provides for the freedom from arbitrary search and entry.
  4. Counsel Kuira for the defendants, relies on two affidavits deposed to by himself and the other by the first defendant Tom Kanol. The applicants however objected to the affidavits relied on as both deponents are not custodians of the information deposed to, hence they both have given hearsay evidence.
  5. I accept the applicant’s submissions that both deponents, particularly Tom Kanol, although named as a party to this proceeding as agent of the WH Provincial Administration, has not disclosed anywhere in his affidavit sworn on 05 December 2023, his interest nor clarified his association with the second defendant. The evidence contained therein, is mostly hearsay rather than direct evidence. Further, in the only 1 or 2 paragraphs in which he attempts to give direct evidence, he fails to qualify how the information about the second defendant and its business affairs is within his personal knowledge. In my view therefore, his evidence is far less than reliable. An employee of the second defendant having direct knowledge and information would have been a preferrable witness in this regard.
  6. Even if weight was to be given to Mr. Kanol’s affidavit, which is not for the reasons mentioned above, he has deposed to a different entity all together who is not a party in this proceeding, where Mr. Kanol alleges carrying out an exercise to reposes vehicles/ machineries. He however has not mentioned anywhere in his affidavit, that he is also investigating the plaintiff company or any of the machineries registered under the plaintiff company nor the seven (7) machineries in issue. He has failed to provide that crucial piece of evidence.
  7. In relation to the affidavit sworn on 04 December 2023, by counsel Kuira for and on behalf of his clients, I am somewhat appalled to see the increasing number of lawyers serving as both advocate and witness in a formal court proceeding. This practice is highly improper and unethical to say the least.
  8. It will be remiss of me not to remind lawyers to reacquaint themselves with their Professional Conduct Rules 1989 which clearly prescribes the required standards of behavior for members of the legal profession in Papua New Guinea.
  9. Section 14 and 15 of the Rules clearly state:-

“(14) A lawyer shall not accept instructions in a case in which he has reason to believe that he is or is likely to be a witness.

(15) A lawyer shall withdraw from representing a client if – (a) it becomes apparent to him that he is or is likely to be a witness on a material question of fact.............”


  1. The applicant’s lawyer in this case has properly objected to Mr. Kuira’s affidavit in that the combination of roles may easily prejudice a party’s rights in the litigation and may also give rise to a conflict of interest between lawyer and client. A witness is required to testify on the basis of personal knowledge whilst an advocate is expected to explain and comment on the evidence given by others, and thus, an advocate cannot be a witness himself. The only exceptions in my view would in a case where there is uncontested evidence and also where the lawyer is required to depose to his rendered legal service, etc. Neither is reflected in Mr. Kuira’s affidavit.
  2. If Mr. Kuira was deposing to another court proceeding that he was involved in as the lawyer, then he should have only deposed to that and attach the relevant court documents without saying anything further. Instead, his affidavit contained his analysis and or opinion of his client’s case, which in my view is highly improper.
  3. With what has been presented before me, it is uncertain as to whether I should take Mr. Kuira’s statement as evidence or as his personal analysis of his client’s evidence.
  4. In any event, it is obvious that Mr. Kuira intended to hold himself out as a witness in this proceeding, which he has done so through swearing and filing of his own affidavit in support of his client’s case. Thus, the proper thing that should have been done under the circumstances was to engage a different lawyer to represent the defendants in this application as Mr. Kuira has either intentionally or unintentionally appointed himself as a witness.
  5. I therefore do not place much weight on Mr. Kuira’s affidavit supporting his client’s objection to this application.
  6. During submissions, Mr. Kuira attempted to justify his client’s detention of the plaintiff’s properties by submitting that the machineries ‘may have been purchased by tax payers monies’. Without any substantive evidence before this court, I am of the view that the defendants ‘claim is mere speculative at this juncture.
  7. He further supports that speculation by relying on the completed case of OS.188 of 2023 between the Western Highlands Provincial Administration against the Western Highlands Development Corporation, its Directors and the acting Registrar of companies. This case related to the shareholding issues surrounding the business arm of the WH Provincial Administration. The court notes that the plaintiff herein was never a party to that proceeding.
  8. The final orders issued on 10 October 2023 in OS. 188 of 2023, does not in any way entitle and or authorize the defendants in this proceeding, to seize and detain the Plaintiff’s machineries. The first and second defendants have not provided any legal basis at all for the detention.
  9. Hence, I find that the unauthorized seizing of the plaintiff’s machineries on 06 July 2023 was unlawful and its continuous detention is unlawful and remains unlawful.
    1. Has the Plaintiff/Applicant satisfied the principles required for the grant of an interim injunction?
  10. The court has discretion whether to grant or refuse interim injunction.
  11. The established legal principles governing whether an interim injunction should be ordered are found in numerous cases including Chief Collector of Taxes v Bougainville Copper Limited (2007) SC853 and Ramu Nico Management (MCC) Limited and Ors v Tarsie and Ors (2010) SC1075. The principles confirmed in the case of Chief Collector of Taxes case is that an applicant for an interim injunction must show that:

(1) There is a serious question to be tried;

(2) An undertaking as to damages has been given;

(3) Damages would not be an adequate remedy if the interim order is not granted; and

(4) The balance of convenience favours the granting of the interim order.

Serious question to be tried


  1. There is undisputed evidence in these case that the machineries in question, were seized by the defendants with the assistance of the police, without any Search Warrant nor any formal orders from a court of competent jurisdiction for seizure and detention of property.
  2. Furthermore, the defendants have not provided any evidence nor have they referred the court to any law authorizing them to seize and detain the machineries without the consent of the applicant being the registered owner at the time of the seizure. There is also no evidence before the court, of any criminal investigations and or formal charges being laid against applicant company and or its directors. Defendants ‘counsel Mr. Kuira also concede to this during submissions.
  3. There is therefore no legal actions, including injunctions or restraining orders taken out by the defendants against the plaintiff company and or its directors.
  4. In my view, there exists a serious question to be tried.

Balance of Convenience


  1. I apply and adopt the reasoning and questions raised by his Honour Cannings J in the case Ewasse Landowners Association Incorporated v Hargy Oil Palms Ltd (2005) 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-honored 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?”


  1. There is undisputed evidence that the machineries are registered in the applicant’s name ‘Eagle Supplies Limited’.
  2. The court takes judicial notice of the applicant’s Certificate of Incorporation and its registration under the Companies Act 1997, which is attached to the company director’s affidavit. Thus, it is a registered business which is most likely to suffer some form of economic loss should detention of its machineries continue.
  3. The evidence before the court is that the machineries were unlawfully seized on 06 July 2023 and detained by the defendants to the date of hearing of this application.
  4. In my view, the applicant will or is suffering the greatest inconvenience and thus, the balance of convenience favors granting of the orders.

Damages not an adequate remedy


  1. I find that the Undertaking as to Damages filed on 12 July 2023 has been properly signed by the person having authority to commit the company, who is the Managing Director of the company, Mr. Arnold Kuk. The undertaking is duly stamped with the plaintiff company’s seal.
  2. In terms of damages, I will accept Mr. Pora’s submissions that the tax payers monies cannot be wasted on poor decisions by the defendants for the unlawful detention of properties duly owned by a private company.
  3. I am therefore of the view that damages will not be an adequate remedy if injunction is not granted.

ORDERS


  1. The Plaintiff’s properties namely:-

Currently in the custody of the First and Second Defendants be immediately released to the Plaintiff for storage at the Plaintiff’s yard located at Kalex Investment Limited’s compound, Kimininga, Mt Hagen, Western Highlands Province.

  1. Pursuant to Order 14 Rule 10(2) of the National Court Rules, the Plaintiff is hereby authorized to execute Order No.1 above, with the assistance of police from the Papua New Guinea Royal Constabulary and or the Plaintiff’s employees.
  2. Pursuant to Order 12 Rule 1 of the National Court Rules and Section 155(4) of the Constitution, the First and Second Defendants, their servants and agents are hereby restrained from:-
(b) Threatening, assaulting and or intimidating the Plaintiff’s directors, employees, servants and or agents.
  1. Costs follow the event.
  2. Time shall be abridged to time of settlement to take place forthwith.

____________________________________________________________
Henry Pora Lawyers: Lawyers for the Plaintiff
Kuira Lawyers: Lawyers for the First & Second Defendants

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