Bagari v Marape [2014] PGSC 41; SC1364 (11 July 2014)

SC1364

PAPUA NEW GUINEA
IN THE SUPREME COURT OF JUSTICE

SCA NO 20 OF 2014 & SCA 28 OF 2014

BETWEEN

PASTOR STEVEN BAGARI & FOUR (4) OTHERS WHOSE NAMES APPEAR IN THE SCHEDULE "A" TO THIS WRIT
First Appellants

AND

GEBI DABU - PRESIDENT OF KIWAI LOCAL-LEVEL GOVERNMENT
Second Appellant

AND

BENZES KUDI ALUSI - PRESIDENT OF ORIOMU BITURI LOCAL-LEVEL GOVERNMENT
Third Appellant

AND

HON. JAMES MARAPE, MINISTER FOR FINANCE
First Respondent

AND

SCHADRACH HIMATA, SECRETARY FOR MINING
Second Respondent

AND

INDEPENDENT STATE OF PAPUA NEW GUINEA
Third Respondent

AND

OK TEDI MINING LIMITED
Fourth Respondent

AND

PNG SUSTAINABLE DEVELOPMENT PROGRAM LTD
Fifth Respondent

AND

OK TEDI DEVELOPMENT FOUNDATION LIMITED
Sixth Respondent

AND

BANK OF SOUTH PACIFIC LIMITED
Seventh Respondent

AND

AUSTRALIA AND NEW ZEALAND BANKING GROUP (PNG) LIMITED
Eighth Respondent

Waigani: Makail, J
2014: 19th June & 11th July

PRACTICE & PROCEDURE – Application for leave to appeal – Interlocutory rulings – Rulings on transfer of proceeding to Commercial Court and stay of ex parte interim injunction – Exercise of discretion – Principles of – Arguable case – Whether proposed grounds are arguable – Power to stay ex parte interim injunction – Substantial injustice – No recourse available in Court below – Supreme Court Act – s. 14(3)(b).

Cases cited:

Matiabe Oberia v. Michael Charlie & The State (2005) SC801
Gary McHardy v. Propsec Security Limited [2000] PNGLR 279

Counsel:

Mr A. Baniyamai, for Appellants
No appearance, for First Respondent
Mr A. Mana, for Second & Third Respondents
No appearance, for Fourth Respondent
Mr R. Lindsay, for Fifth Respondent
No appearance, for Sixth – Eighth Respondents

RULING ON APPLICATION FOR LEAVE TO APPEAL

11th July, 2014

1. MAKAIL, J: These proceedings SCA No 20 of 2014 and SCA No 28 of 2014 are related as they arise from the same proceeding in the National Court. Justice Hartshorn who dealt with the matter in the National Court gave two separate interlocutory rulings which form the basis of these proceedings seeking leave to appeal. If leave is granted in each case, the appellants will move their application for stay in each case.

National Court Decisions

2. The interlocutory rulings are:

(a) On 26th February 2014, his Honour transferred the matter from the General Civil Court to the Commercial Court and dealt with it as a commercial matter; and

(b) On 28th February 2014, his Honour stayed the ex parte interim orders issued by the National Court comprising of the Deputy Chief Justice, Justice Salika on 24th January 2014.

3. The application for leave in the proceeding under SCA 28 of 2014 challenges the ruling of 26th February 2014 and the other under SCA 20 of 2014 challenges the riling of 28th February 2014. Both proceedings were consolidated and heard together to save time and costs.

Background Facts

4. Based on five volumes of Pastor Steven Bagari's affidavit, the facts can be briefly restated as follows; the appellants claim to be persons and representatives of villages and communities in the South Fly area and beneficiaries of a compensation agreement made in 2001 for damage done to the river and land as a result of dumping of waste into the Fly River by the fourth respondent OK Tedi Gold Mine Limited. Following the announcement by the fourth respondent to close the mine, it paid a sum of K500 million into a trust account but continued operations.

5. On 23rd January 2014, the appellants commenced proceeding in the National Court to claim compensation. On 24th January 2014, they applied and were granted an ex parte interim injunction by the Deputy Chief Justice, Justice Salika to stop further dumping of waste into the Fly River and payment of money into Court. On 12th February 2014, due to the unavailability of a judge, the inter parte hearing of the interim injunction did not take place. On 13th February 2014, the matter was brought to Justice Davani's attention and her Honour issued chamber directions for the matter to be heard on 06th March 2014.

6. On 26th February 2014, the appellants, second and third respondents appeared before Justice Hartshorn and the mentioned respondents applied and were granted an order to have the matter transferred from the General Civil Court to the Commercial Court and two days later, were granted a stay of the ex parte interim injunction. No date was fixed for the inter parte hearing of the interim injunction until sometimes later when his Honour informed parties that he would hear it on 27th June 2014. The ruling on these applications was reserved until 26th June 2014 but was further adjourned to today. It is not known what transpired on 26th June 2014.

Jurisdiction and Principles on Leave

7. The relevant principles on leave are set out in the case of Matiabe Oberia v. Michael Charlie & The State (2005) SC801. They set out in question form as follows;

1. Is there an arguable case showing that the trial judge was wrong?
   
2. Does the applicant have other recourse in the Court below?
   

100. Was the ruling within the discretion of the Court and that such discretion was exercised unreasonable or on a wrong principle or mistake of fact?
     

4. Does the decision have any bearing on the final determination of the issues between the parties?
   
5. Will substantial injustice be caused by allowing the decision to stand?
   
6. Has cause been shown that the trial process should be interrupted by an appeal?
   

Parties' Submissions

8. From the submissions of the parties and noting the 5 proposed grounds of appeal in proceeding under SCA 28 of 2014, the gist of the appellants' case is that this was not a commercial matter and his Honour wrongly exercised his discretion when he ordered its transfer from the General Civil Court to the Commercial Court for further determination. There was no basis for the exercise of discretion in that manner and contrary to the requirements of O. 10A, r. 11(b) of the National Court Rules ("NCR"). As a result, the other respondents were not heard on the application.

9. As to the proceeding under SCA 20 of 2014, the appellants' case is that his Honour exceeded his powers when he granted a stay of the ex parte interim injunction because there is no specific power vested in the National Court to grant a stay against an ex parte order, especially when the matter was allocated a hearing date for arguments inter parte on the issue of the continuation of the ex parte interim injunction of 24th January 2014.

Arguable Case

10. The order for transfer by his Honour must be put into perspective to appreciate why his Honour made such an order. It was during the Court vacation when the appellants filed proceeding in the National Court. There were about three or four judges on duty at that time. Three of them were the ones whose names have been mentioned here and it must be appreciated that at this time of the Court's calendar, securing a judge to hear an urgent application such as an application for interim injunction is subject to the availability of a judge.

11. On 24th January 2014, the appellants managed to get a hearing before the learned Deputy Chief Justice and were granted the ex parte interim injunction. The return date was 12th February 2014. But for some reason, and there was a suggestion that the learned Deputy Chief Justice had some conflict in the matter as the claim arose from the area where he hails from, the inter parte hearing did not take place.

12. Because of the urgency of the matter, now that OK Tedi Mining Limited was restrained from dumping waste into the Fly River and as a result, its operations at the mine was likely to be shut down, the next day 13th February 2014, Justice Davani was consulted as to how the interim injunction should be addressed and when an inter parte hearing was likely. The earliest her Honour would be available was 06th March 2014 and that was the date set for the inter parte hearing.

13. OK Tedi Mining Limited was placed in a dilemma because the date given was 3 weeks away and would have to shut down its operation if it was not able to dump waste into the river. The next available judge was Justice Hartshorn and the second and third respondents took the lead to enquire with his Honour as to his availability and the response was positive. But it appears that it was subject to one proviso. As his Honour was the Commercial Court Track Judge Administrator, the matter had to be transferred to the Commercial Court, and to do that, an application on notice must be made under O. 10A of the NCR. That was duly attended to by the second and third respondents and eventually, an order for transfer was granted.

14. Appreciating the background of the application for transfer and the order itself, two matters of significance should be noted. First, during Court vacation period, hearing of urgent applications are subject to availability of a judge. If there is no judge, the application cannot be heard. Secondly, one judge was available to hear the application for extension of the interim injunction earlier than the other. While it is acknowledged that a date had earlier been fixed for the inter parte hearing, that the matter was originally filed and listed in the General Civil Court, given the urgency of the matter and the imminent closure of the mine, it was in the interest of both sides to have an early hearing.

15. The primary dispute in the National Court is about compensation. While that dispute is yet to be resolved, the appellants have obtained an interim injunction against the respondents. As a result, OK Tedi Tedi Mining Limited was restrained from dumping waste into the Fly River. The threat to close the mine was imminent. The consequence would have been far-reaching; loss of jobs and loss of revenue for the country, to name a few. With respect, contrary to the appellants' submission that this matter cannot be categorised as a commercial matter and it was wrong for his Honour to order its transfer to the Commercial Court, I am satisfied that it was.

16. I am further satisfied that given that Justice Hartshorn is the head of the Commercial Court Track, the second and third respondents had appropriately applied on notice to the Court to have the matter transferred to the Commercial Court. Furthermore, I am satisfied that the contention that the absence of the other respondents at the hearing of the application is not a serious breach of the Rules as the main party to the dispute is the appellants and they were heard. For these reasons, I am not satisfied that there is an arguable case in proceeding under SCA No 28 of 2014.

17. But I do find that there is an arguable case in proceedings under SCA No 20 of 2014 because it is arguable that his Honour exceeded his jurisdiction when he granted a stay of the ex parte interim injunction. This conclusion is apparent on the evidence before the National Court and the power of the National Court to stay an interim injunction pending further hearing. The main argument against the grant of stay is that the Court has no power to grant a stay of an interim injunction, especially where it is made ex parte. The Court's power is found in O. 12, r. 8 of the NCR where it may set aside the interim injunction and I add that power can be exercised at the return date fixed by the Court.

18. The second and third respondents submitted that the Court has power under O. 12, r. 1 of the NCR to grant this order. His Honour adopted and applied the principles on stay relevant to Supreme Court stay orders in Gary McHardy v. Propsec Security Limited [2000] PNGLR 279 and in the exercise of his discretion under this rule, his Honour did not set aside the interim injunction but stayed it until such time where he is available to hear the parties inter-party. This submission was countered by the appellants who submitted that O. 12, r. 1 (supra) and the principles of stay applicable to Supreme Court stay orders have no application because the only opportunity and recourse available to the respondents to challenge the grant of the ex parte interim injunction is when parties return to Court for inter parte hearing and the power of the Court under O. 12, r. 8 (supra) is invoked to set aside the ex parte interim injunction. Given the competing arguments, I am satisfied all the proposed grounds are arguable.

Recourse in the Court below

19. But is there recourse in the National Court? The appellants submitted that once a decision is made to list a matter as a commercial matter, there is no other recourse below in challenging the decision except to appeal. They further submitted that since there is no specific power to stay an ex parte order pending an inter parte hearing, the Court was devoid of jurisdiction to stay the interim injunction. When his Honour heard the application for stay and granted a stay before the inter parte hearing, the effect was that the interim injunction was negated, had no force, the status quo prior to the interim injunction was restored and there was nothing further to argue at the inter -party hearing on the issue of continuation of the interim injunction.

20. The second and third respondents submitted that the appellants' submission on this point is misconceived because their right to be heard on the continuation of the interim injunction has not been lost by the grant of stay. The stay was an interim measure to ensure that the operations at the mine continue pending the final determination of the interim injunction.

21. I accept the appellants' submission. With respect, the second and third respondent's submission misses the point and the point is that, the matters that are subject of the continuation or otherwise of the interim injunction have been considered by his Honour as noted from his reasons for decision. Matters such as an arguable case, balance of convenience and overall interests of justice are relevant in an application for interim injunction, were considered by his Honour based on the evidence before him and his Honour reached the conclusion that there be a stay of the interim injunction. The consequence is that the interim injunction was negated, had no force, the status quo prior to the interim injunction was restored and there was nothing further to argue at the inter parte hearing. Thus, to have the matter referred to his Honour, with respect, would serve no purpose.

Unreasonable exercise of discretion on a wrong principle or mistake fact

22. The appellants, second and third respondents repeated their submissions on the point of arguable case here. Except for proceeding under SCA No 28 of 2014, I am satisfied that in proceeding SCA No 20 of 2014, given the facts of the case, it is arguable that his Honour misapplied the principles of interim injunctions and acted in excess of his jurisdiction when he stayed the ex parte interim injunction.

Bearing on the final determination of the issues between the parties

23. The appellants submitted that both decisions have a bearing on the determination of the issue of the continuation of an ex parte interim injunction in the sense that once the matter was listed as a commercial matter, the application for stay was heard on short notice. This resulted in not all parties being present and heard.

24. The second and third respondents repeated their submissions on the arguable case and recourse in the Court below. As I have pointed out in proceeding under SCA No 28 of 2014, an early hearing was important for all parties and to disrupt it would be counter-productive. However, as the second and third respondents have further obtained a stay of the interim injunction, as I noted above, the Court has actually canvassed the issues between the parties and it is arguable that it is wrong to revisit its own decision. I am satisfied that the ruling in proceeding under SCA No 20 of 2014 has a bearing on the final determination of the issues between the parties.

Substantial injustice

25. The appellants submitted that they stand to suffer substantially if the matter were allowed to be pursued as it were. Firstly, they have been denied the right to be heard on the issue of the continuation of the ex parte interim injunction because the orders were stayed before the inter parte hearing and secondly, the listing of it in the Commercial Court means it will have to be fast tracked when it is not a commercial matter per se. Again, the second and third respondents advanced the same argument they advanced earlier in relation to the question of recourse in the lower Court. For the reasons that have been given, I am further satisfied that substantial injustice will occur if the issue of the continuation or otherwise of the interim injunction granted by the National Court is revisited after it was stayed by the same Court.

Interruption of trial process by an appeal

26. Finally, the appellants submitted that in the interests of justice, the trial process should be interrupted. The extent of the Court's jurisdiction in listing matters as commercial matters and in granting stay of ex parte orders pending inter parte hearing need to be clarified by the Court as such discretions if they exist, may be subject of abuse.

27. A typical injunction case where circumstances warrant a grant of an ex parte interim injunction on an urgent basis and if granted, a return date is fixed for inter- parte hearing. The purpose of an inter parte hearing is to give the defendant(s) the opportunity to be heard on the continuation or otherwise of the interim injunction. The return date is usually fixed by the Court in consultation with or at the request of the plaintiff(s). Where the time period between the grant of the ex parte interim order and the return date is long, it is not uncommon for the Court to give liberty to the parties, particularly the defendant(s) to apply to set aside or vary the ex parte interim injunction prior to the return date. This is where the right to be heard or principles of natural justice is observed.

28. But here, instead of taking this course, the same Court granted a stay of the ex parte interim injunction and it is arguable that the course the Court took is unprecedented and tantamount to an abuse of process because it is contrary to the established practice as discussed briefly above, especially when it is not supported by past case precedents on point and that the same issues that were to be canvassed by the Court at the inter parte hearing have been canvassed by the Court at the stay hearing. For this further reason, I am satisfied that there is sufficient basis for the trial process to be interrupted by an appeal.
Conclusion

29. As I have found that the proposed grounds in proceeding under SCA No 28 of 2014 are not arguable, it will not proceed to full hearing while proceeding under SCA No 20 of 2014 will be allowed.

Order
30. The orders are:

1. Leave is refused in proceeding under SCA No 28 of 2014 and accordingly, the proceeding is dismissed.

2. Leave is granted in proceeding under SCA No 20 of 2014.

3. In proceeding under SCA No 20 of 2014, the appellants are directed to file and serve a notice of appeal within 21 days of this order.

4. Subject to consultation with the parties, the application for stay in proceeding under SCA No 20 of 2014 is adjourned to a date to be fixed.

5. The appellants shall pay the respondents' costs of the proceeding under SCA No 28 of 2014, to be taxed, if not agreed and costs in proceeding under SCA No 20 of 2014 shall be in the appeal.

6. Time shall be abridged.

_______________________________________________________________
Baniyamai Lawyers: Lawyer for Appellants
Allens Linklaters Lawyers: Lawyers for Second & Third Respondents
Gadens Lawyers: Lawyers for Fifth Respondent