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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE
SCA. No. 1 of 2004
SAMSON JUBI & THREE (3) OTHERS
v
SUSAN EDNA FRASER & TWO (2) OTHERS
WAIGANI: Injia, DCJ
2004: 15th & 28th January
SUPREME COURT APPEALS – Stay of interim injunctive orders – Four Fishing vessels – Principal factors – Arguable grounds of appeal, balance of convenience and maintenance of status quo, damages as an adequate remedy, considered – Application refused.
Counsel:
T. Nonggorr for the Appellant
B. Andrew for the Respondent
RULING
INJIA, DCJ: The Appellants apply for a stay of the interlocutory judgment of Davani, J of 2nd January 2004, pending the hearing of the appeal. Her Honour granted interim injunctions in respect of four fishing vessels, the issue of ownership of which was the subject of proceedings commenced by the Respondents in WS No. 1809 of 2003.
The facts in short are that on 19 November, 2002 the parties entered into written Contracts of Sale in respect of four(4) fishing vessels supposedly "owned" by the Respondents. The vessels were registered in Australia supposedly under the respondents’ names. The appellants agreed to pay fixed prices for the vessels. In compliance with the agreements, when the respondents delivered the vessels at Daru, the Appellants failed to complete the contracts by paying the purchase price. Subsequently, the parties entered into some mutual arrangements to conduct business and commence fishing operations under revenue –sharing arrangements, the precise terms of which are in dispute. The Appellants deregistered the Australian registration of the four (4) vessels and registered them in Papua New Guinea under the Appellants’ names, under different names. The transfer of ownership through registration is in issue. Fishing licences were also obtained from PNG authorities. Fish caught in PNG waters was taken to Cairns and exported by the respondents and revenue received by the Respondents. Disagreements occurred between the parties as the verification of fish caught, revenue earned, distribution of revenue between them and tax liabilities and other things. This resulted in the Appellants reporting the fishing activities of the Respondents to PNG authorities. On 23 October, 2003 PNG authorities seized the vessels and took them to Port Moresby where the business operations underwent investigations. The vessels were later released to the Appellants. On 13 November, 2003, the Appellants filed proceeding in the Supreme Court of Cairns seeking declaratory relief and damages. The Respondents filed their own proceeding s at the Waigani National Court seeking declaratory relief and damages. Justice Davani granted interim injunctive orders in favour of the respondents. These interim orders are now the subject of these appeal proceedings.
The interim injunctive orders appealed from are as follows:
An appeal against the decision was filed on 8th January 2004. Pursuant to s.14(3)(b)(ii) of the Supreme Court Act, leave is not required for appeals against an interlocutory judgment in respect of the grant or refusal of an injunction: Gary McHardy v Prosec Security and Communications Ltd trading as Protect Security, unpublished Supreme Court Judgment SC 646 dated 30 June, 2000.
The Notice of Motion before me seeks the following orders:
The principles on grant of stay are set out in McHardy’s case. The grant or refusal of stay is discretionary and it is exercised "on proper principles and reasonably according to the natural justice to all parties." The relevant factors and circumstance to be taken into account include the basic premise that the judgment creditor is entitled to enjoy the benefit of the judgment. An applicant must show the following:
The principles on grant of interim injunctions are canvassed by Kandakasi, J, Golubana No. 35 Ltd v Bank of South Pacific, unreported National Court judgment N2309 dated 11 November, 2002. There are three basic requirements – the Applicant must demonstrate serious questions to be tried and determined, that the balance of convenience favours the grant of interim injunction in order to preserve the status quo, and damages is not an appropriate remedy: Also see Employers Federation Care of PNG v PNG Waterside Workers and Seaman’s Union & Anor, unreported National Court judgment N393; AGK Pacific (NG) Ltd v William Brad Anderson & Karson Construction (PNG) Ltd & Anor, unreported National Court judgment N2062 and Markdeal Ltd & Anor v Mineral Resources Development Corporation Pty Ltd, unreported National Court judgment N1472.
The appellants rely on two principal factors. First, they have arguable grounds of appeal which are likely to succeed. It is contended by Mrs Nonggorr for the Applicants that Her Honour erred in the exercise of her discretion to grant the interim injunctions in that the respondents did not have serious issues to be tried, that the balance of convenience did not favour the grant of injunction to maintain the status quo and that damages would have been an adequate remedy. The Respondents lacked evidence to show they were the registered owners of the four vessels when they purportedly sold the vessels under Contracts of Sale and that subsequent investigation revealed that the vessels were registered in the name of other persons. Subsequently the vessels were sold to the Appellants under an oral agreement when the original contracts were not completed. Under the oral agreement, the purchase price was to come from on third of the proceeds of the sale of the catch of fish, paid to Mundi No. 1’s account, out of which 50% would be paid by Mundi No. 1 to the Respondents for the purchase of the vessels. The Respondents did not pay those monies and did not account to Mundi for the catch and the proceeds of the catch. Subsequently, the four vessels were registered in PNG under Mundi’s name. As the registered owner of these vessels, Mundi is entitled to possession and use of the vessels. The vessels were in the possession of the Applicants and conducting fishing operations when they were seized under the Court order and taken to Port Moresby, where they are lying idle.
Secondly, as a result of the injunction, the Mundi’s business operations has been shut down. This is unfair on the appellants. The injunction should be discharged to allow the Appellants to continue fishing operations pending the trial, under proposed arrangements set out in the Notice of Motion. If this Court were to set aside the injunctive orders, there is evidence to show that the National Fisheries Authority may renew the fishing license held by the Appellants. They also seek the release of AU$30,000, the proceeds of sale of fish, currently held in the National Court Trust Account to meet maintenance and operational expenses.
Thirdly, Mundi has a good chance of succeeding in their action instituted in Cairns and defending the Respondent’s action commenced at Waigani. In any case, if the Appellants were successful in the National Court proceedings, they will not be adequately compensated in damages because in the past, they have failed to account for the catch and revenue from the catch and pay the Appellants their share of the revenue.
These arguments are elaborated in Mrs Nonggorr’s extensive written submissions. Mrs Nonggorr has made many references to the evidence before Her Honour in an effort to demonstrate areas where Her Honour failed to understand the evidence as a whole or the contradiction in the evidence as to ownership rights and evidence which favoured the Appellants. Mrs Nonggorr also pointed out to deficiencies in parts of the pleadings in the Statement of Claim, as to terms of the Contracts.
Mr Andrew for the Respondents submits that there was overwhelming evidence before Her Honour to warrant the conclusion that the Respondents had a serious case to be tried on the issue of ownership of the vessels, that the balance of convenience favoured the maintenance of the status quo to preserve the vessels pending trial, and that damages would not be an adequate remedy. The writ alleged fraud in the Appellant’s acquisition of registered titles over the four vessels, that there was never an issue of the Respondent’s ownership of the four vessels when they were purportedly sold to the Appellants under the Contracts of Sale, that the Appellants failed to complete the Contract on the due date by paying the purchase price when the vessels were delivered to the Appellants and that they never entered into any subsequent oral agreement to pay for the four vessels from the proceeds of the catch. Under the Contracts of Sale, the property in the vessels were to transfer to the Appellants upon completion, but since this did not eventuate, the property in the vessels never passed to the Appellants. The vessels were registered in PNG based on false representation to PNG authorities that they owned the vessels. Therefore, the vessels belong to the Respondents and this will be proven at the trial.
Also, the Appellants conspired with PNG authorities to seize the four vessels when they were conducting fishing operations and the vessels were later returned to the Appellants. They have now been seized under the Court order and are now moored at the Port Moresby wharf. The vessels should be retained at the wharf under arrangements made for their maintenance and upkeep under the Court order, so that their present condition and value is preserved. If the vessels are released to the Appellants to be used for fishing operations, they face risk of damage through use and the risk of damage or loss at sea. Damages will not be an appropriate remedy to compensate the Respondents if the Appellants were not successful in the appeal or successful in defending the proceedings in the National Court because they do not have the money to pay for the four ships which are valued at around K1.2 million.
In the alternative, if the Court were minded to grant the application, they seek orders that the vessels be released to, maintained and fishing operations conducted with both parties’ involvement, that the vessels be insured and the proceeds of the catch paid into the National Court Trust Account.
In determining the application, I apply the relevant criteria set out by the Supreme court in the McHardy case.
On the evidence before me and the arguments advanced by both parties, I make the following findings and conclusions:
For those reasons, notwithstanding my findings in respect of items No. 1 and 2 above, I am not satisfied that the Appellants have
made out a case for a stay of the order appealed from. I dismiss the application with costs to the Respondents.
_____________________________________________________________
Lawyer for the Appellants : Gadens Lawyers
Lawyer for the Respondents: Maladinas Lawyers
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