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Supreme Court of Papua New Guinea |
PAPUA NEW GUINEA
[Supreme Court of Justice]
SCA 92 of 2002
BETWEEN
PAUL PARAKA
trading as PAUL PARAKA LAWYERS
Appellant
AND
EASTERN HIGHLANDS PROVINCIAL GOVERNMENT
Respondent
Waigani: Sakora, Sevua & Lenalia, JJ.
2004 : 1 July & 2005 : 8 November
PRACTICE and PROCEDURE – Notice of Motion – Motions claiming orders not pleaded in originating process – Whether parties entitled to relief not pleaded in statement of claim.
PRACTICE and PROCEDURE – Mareva Injunction - Basis of – Conditions or requirements for grant – Whether respondent had satisfied these conditions – Relevant principles – Assets within jurisdiction – Evidence of dissipation of assets.
Cases cited in judgment.
JT Stratford & Sons Limited v. Lindley [1964] 3 All ER 102
American Cyanamid Co. v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396
Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers & Seamens Union and Lawrence Titimur & Ors, (1983) unreported, N393, 11 October 1993
Mareva Compania Naviera SA v. International Bulkcarriers SA [1975] 2 Lloyds Rep 509; [1980] 1 All ER 213
Third Chandris Shipping Corp v. Unimarine SA [1979] QB 645
Riley McKay Pty Ltd v. McKay [1982] 1NSWLR 264
Jackson Sterling Industries Pty Ltd [1987] HCA 23; (1987) 61 ALJR 332
Mt. Uriwaka Enterprises Pty Ltd v. Bernard Baxter & Ors [1988-89] PNGLR 244
Ume More v. UPNG [1985] PNGLR 40
Mussau Timber Development Pty Ltd v. Santee Mangis & Ors [1994] PNGLR 1
Gobe Hongu Ltd v. National Executive Council & Ors, (unreported) N1920, 8 June 1999
PNGBC v. Jeff Tole, unreported, SC690, 27 September 2002.
Held
H. Nii with N. Lame for Appellant
G. Poole with C. Jaminan for Respondent
8 November 2005
BY THE COURT: The appellant appeals against the decision of the National Court constituted by Kandakasi, J on 23 November 2002 at Waigani.
The Court is unable to locate a sealed copy of the order, the subject of this appeal, however at page 178 of the appeal book, we note that the trial Judge said the following:-
"orders in terms of notice of motion paragraphs 2 (a) and (b), 3 (a) and (b), 4 (a), (b) and (c). The rest of the orders sought are adjourned sine die. Defendant shall be at liberty to apply for variation or set aside, (sic) lifting of the orders on three days notice."
A perusal of file WS 1104 of 2002 revealed that the order taken out by the plaintiff, now respondent, has also not been sealed. That may have been due to the stay order issued by the Supreme Court on 25 October 2002. Be that as it may, it is the responsibility of the respondent’s counsel to file the order, have it sealed and served on the other side. This Court cannot continue to remind lawyers of their responsibilities in respect of simple and basic requirements.
The notice of motion at pages 18 – 20 of the appeal book reveals that the orders granted, which we alluded to above, are in these terms:
(a) deposit with the Registrar of the National Court Waigani, all of the books, records, journals and trust records, (as defined in Section 1 and Section 6 of the Trust Account Regulations (1990) within 24 hours of the making of this order.
(b) deposit with the Registrar, National Court all moneys held on trust by the first defendant for the plaintiff within 24 hours of making this order.
The appellant has stated several grounds of appeal, but for our own purpose, it is not really necessary to cite all those grounds in full, suffice it to say that the appeal raises one fundamental issue - error of law, and the appellant has raised procedural and grounds of such error in its grounds of appeal. Despite the number of grounds of appeal, we are of the view that the issue is a narrow one and it is an issue of law which does not require citing all the grounds of appeal. We think that it is sufficient only to refer to the motion on foot before the National Court then because the appeal is centered on the respondent’s motion which was given preference whilst the other motions were not heard.
And therefore we refer to the motions pending at the time of hearing the respondent’s motion. There were three applications on foot then. The first is Document No. 2 and was filed by Pacific Legal Group on behalf of the respondent on 29 August 2002 and made returnable on 30 August 2002. The second motion is Document No. 14, filed on 19 September 2002 by Mirupasi Lawyers on behalf of the Attorney General and The State and it sought an order inter alia, that they be joined as parties to the proceedings. It was returnable on 20 September 2002. The third application is Document No. 17, and was filed on 19 September 2020 by Harvey Nii Lawyers on behalf of the appellant and was returnable on 20 September 2002. That motion sought orders that the proceedings be dismissed for showing no cause of action, or alternatively, the proceedings be stayed until OS 547 of 2002 is determined.
On the face of the records, we consider that the application by the Attorney General and the State should have been heard first as a matter of common sense and logic because the State had an interest in this case. Other than that, there is no prejudice against the other parties if the Attorney General and the State were added as parties to the proceedings. However, without any reason given, the trial Judge declined to hear that motion therefore we consider that he erred in the exercise of his discretion. He must give reasons.
The motion by the appellant was to dismiss the proceedings, or stay the other related proceedings, OS 547 of 2002. Dismissing the proceedings would have effectively put an end to the whole suit. If the trial Judge had considered that there was a cause of action in law, he would not have granted the first relief, but perhaps the second.
However, we are of the opinion that the error by the trial Judge in relation to the respondent’s motion go beyond the exercise of his discretion. We accept the appellant’s submission that the trial Judge erred in law when he granted injunctive orders to the respondent. We have previously adverted to the orders granted by the trial Judge. We consider that there are three principal reasons that the appeal should be upheld.
Firstly, the trial Judge erred in law in granting injunctive orders to the respondent when it had not established any of the relevant conditions which are required to be established before a Court grants an injunction. We reiterate that the law in this area is well settled in our jurisdiction and there are several authorities on this area.
We start with the House of Lords decision in JT Stratford & Sons Limited v. Lindley [1964] 3 All ER 102; and the relevant legal principles subsequently laid down in American Cyanamid Co. v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396; adopted in Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers & Seamens Union and Lawrence Titimur & Ors, (1983) unreported, N.393, 11 October 1993. None of those conditions were ever put in the respondent’s submissions to the trial Judge. Therefore we need to ask what is the basis for granting injunctive orders to the respondent? An injunction is not granted as a matter of course, there must be relevant considerations which must first be established by the party asking for it before it is granted.
The order granted in terms of paragraph 2 (a) (i) and (ii) of the respondent’s notice of motion are in the nature of a mareva injunction. A mareva injunction in an interlocutory injunction restraining the defendants from removing assets from or dissipating assets within the jurisdiction. The name is derived from the famous case of Mareva Compania Naviera SA v. International Bulkcarriers SA [1975] 2 Lloyds Rep 509; [1980] 1 All ER 213, which established the principle that the Court has jurisdiction to grant such an injunction to prevent a defendant from disposing of his assets in order to defeat a judgment.
There are criteria for the grant of a mareva injunction at common law, however the guidelines were established by Lord Denning MR in Third Chandris Shipping Corp v. Unimarine SA [1979] QB 645 at 668-669. These are:-
(i) The plaintiff should make full and frank disclosures of all matters in his knowledge which are material to the Judge to know.
We say this is the appellant’s duty of disclosure and we say no more of that criteria
(ii) The plaintiff should give particulars of his claim against the defendant, stating the ground of his claim and the amount thereof, and fairly stating the ground of his claim and the amount thereof, and fairly stating the points made against it by the defendant.
(iii) The plaintiff should give some grounds for believing that he has assets within the jurisdiction.
(iv) The plaintiff should give some grounds for believing that there is a risk of the assets being dissipated before the judgment.
(v) The plaintiff must give an undertaking as to damages.
This appeal is concerned with evidence or lack of it. The appellant submits that there was no evidence at all before the trial Judge in relation to the appellant’s assets within Papua New Guinea or that the appellant was removing its assets out of the jurisdiction or that the assets in Papua New Guinea, if any, were being dissipated. We accept that submission. The affidavit of Malcolm Smith Kela on 29 August 2002 in support of the respondent’s application does not contain any evidence at all as to this requirement.
Since the above principles were also well received in Australia, perhaps a reference to a NSW Court of Appeal decision and a High Court decision will demonstrate our view.
In Riley McKay Pty Ltd v. McKay [1982] 1NSWLR 264 at 276, the Court of Appeal explained that the basis of the jurisdiction to grant a mareva injunction:-
"is founded on the risk that the defendant will so deal with his assets that he will justify and render ineffective any judgment given by the Court in the plaintiff’s action, and thus impair the jurisdiction of the Court and render it impotent properly and effectively to administer justice in New South Wales."
The decision of the High Court of Australia in Jackson Sterling Industries Pty Ltd [1987] HCA 23; (1987) 61 ALJR 332 confirmed that this approach is correct. In Papua New Guinea, the National Court in Mt. Uriwaka Enterprises Pty Ltd v. Bernard Baxter & Ors [1988] PNGLR 244 expressed the same principles as follows:-
"A mareva injunction may be granted where it appears likely that the plaintiff will recover judgment against the defendant for a sum of money and where there are reasons to believe that the defendant has assets within the jurisdiction to meet the judgment, wholly or partly, but might deal with those assets, whether by removal out of the jurisdiction or disposal within the jurisdiction, so as to make them unavailable in satisfaction of the judgment given."
It is our respectful opinion that Malcolm Smith Kela’s evidence in relation to the appellant remitting monies from Australia is quite insufficient for the trial Judge to rely on. In any event, some of his evidence are inadmissible because they are clearly hearsay. The Administrator of Eastern Highlands Provincial Government should have sworn an affidavit. In our view, there is no evidence of any assets within the jurisdiction, there is no evidence of any assets outside the jurisdiction, and there is no evidence that the appellant’s assets if any, were being removed out of the jurisdiction, or those within Papua New Guinea were being dissipated to the extent that they will not satisfy a judgment against the appellant if entered.
In the Third Chandris’ case, the Master of the Rolls said at 671:-
The mere fact that a defendant having assets within the jurisdiction of the Commercial Court is a foreigner or a foreign corporation cannot, in my judgment, by itself justify the granting of a mareva injunction. There must be facts from which the Commercial Court, like a prudent, sensible commercial man, can properly infer a danger of default if assets are removed from the jurisdiction (our emphasis).
Therefore in relation to the grant of the mareva injunction, we find that the trial Judge erred in law, in granting the orders sought by the respondent on the basis that the respondent’s affidavits in support of the motion did not contain any evidence of probative value, such as the appellant’s assets or business, their sizes, locations of known assets or anything regarding the assets of the appellant. These are materials that should enable the trial Judge to ascertain if there is any risk of removal from the jurisdiction.
From the transcript in the appeal book, the respondent’s counsel did not raise any of these matters in his submissions, and the trial Judge did not address any such issues, or if he did, we are unable to find that in the transcript. In our judgment, the respondent had, to adopt the words of the Master of the Rolls, at 672; "presented an image of themselves made up of words, not of facts."
It is our opinion therefore that the trial Judge erred in granting the orders on 23 October 2002 where the conditions for the grant of an injunction, mareva or otherwise, were not established by the applicant. That application should have been refused because there was no legal basis to grant it.
The other important issue, which is the second reason in our view, is the orders granted under paragraph 4 of the respondent’s notice of motion. We are of the view that this issue does not deserve a great deal of time in addressing because the law is quite clear.
The orders granted in paragraph 4 of the unsealed orders are not pleaded in the statement of claim in WS 1104 of 2002. In fact we can also say that some of the orders granted on 23 October 2002 are not pleaded in the statement of claim. Therefore one needs to ask, what is the basis for granting such orders in the respondent’s notice of motion when the same relief were not pleaded in its statement of claim?
There is clearly an error of law here and we so find. A line of authorities have held that a plaintiff is not entitled to relief which he has not pleaded in his statement of claim. That is trite law as demonstrated in the following cases. Ume More v. UPNG [1985] PNGLR 40 (Supreme Court); Mussau Timber Development Pty Ltd v. Santee Mangis & Ors [1994] PNGLR 1 (National Court); Gobe Hongu Ltd v. National Executive Council & Ors, (unreported) N.1920, 8 June 1999 (National Court) and PNGBC v. Jeff Tole, unreported, SC 690, 27 September 2002. We note that the trial Judge was a member of the Court in the last case referred to above.
This Court reiterates that it is trite law a plaintiff is not entitled in law to a relief he has failed to plead in his statement of claim. To add more to this principle will only serve to confuse it.
Finally, we consider that the trial Judge’s attitude in shunning the other counsel from being heard is a serious denial of natural justice. We note from the transcript that the trial Judge had obviously given more latitude to Mr. Shepperd of counsel for the respondent. This is not natural injustice. "Justice must not only be done, but must be seen to be done" so the old adage goes. Refer Constitution, s.59 – Principles of natural justice. It is unfair to shut out a party from the halls of justice. That is not fairness and justice and that is not the function of the Court.
From the record of this application, it is clearly evident that the appellants counsel was put in a situation where he was forced to intersect and to attract the trial Judge’s attention. This is clearly a one sided affair. We need not stress the importance of a trial Judge being fair to all parties appearing before him, and of giving equal time and opportunity to each counsel to present his client’s case. We find there was a breach of natural justice.
In the light of our opinion, we do not consider it necessary to address the other grounds of appeal. As we alluded to earlier, these two grounds of appeal are sufficient for the Court to uphold the appeal.
Accordingly, it is the judgment of the Court that the appeal be upheld, the orders of the National Court granted on 23 October 2003 are quashed, and the respondent’s notice of motion is remitted to the National Court for determination by another Judge.
Costs shall follow the event.
Orders accordingly.
Lawyers for the Appellant : Harvey Nii Lawyers
Lawyers for the Respondent : Pacific Legal Group
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