Flyniu Airlines Ltd v Faletau [2004] TOSC 40; CV 575 2004 (20 August 2004)

IN THE SUPREME COURT OF TONGA
CIVIL JURISDICTION
NUKU'ALOFA

CV. 575/2004

BETWEEN:

1. FLYNIU AIRLINES LIMITED
2. AIR NATIONAL CORPORATE LIMITED
Plaintiffs

AND:

1. 'ALOVALEAMOEMAPA FALETAU
2. KINGDOM OF TONGA
Defendants

BEFORE THE HON. CHIEF JUSTICE WEBSTER

Counsel: Mr. Edwards for the plaintiffs
Mr. Havea for the first defendants and
Mrs Taumoepeau for the second defendants.

RULING

The Plaintiffs, in particular the 2nd Plaintiff, have since 16 June 2004 been authorised to operate domestic airline services within the Kingdom of Tonga. This case concerns an application for judicial review by them in relation to matters surrounding the revocation on 13 August 2004 of the 2nd Plaintiff's Foreign Air Operator's Certificate [FAOC] by the Minister for Civil Aviation with effect from 16 August. The application was accompanied by lengthy affidavits with extensive productions in their annexes.

This particular ruling is on the Plaintiffs' application for leave to apply for judicial review and for an interlocutory injunction to quash that revocation.

I first saw Mr Edwards, Counsel for the Plaintiffs, on his own at short notice late on the afternoon of 16 August. After hearing his submissions I decided that, as the Plaintiffs had already stopped operating flights in terms of the revocation, there was not the appropriate urgency to grant an interlocutory injunction ex parte there and then, but that I would hold a hearing for all parties on the morning of 17 August.

That hearing duly took place on 17 August, when the 1st Defendant, who was present in person and assisted in relation to some aspects of the factual situation, was represented by Mr Havea; and the 2nd Defendant was represented by the Solicitor General and Miss Fukofuka. I was most grateful to all Counsel for the assistance they gave the Court, especially at such short notice.

By way of background, while it was not easy to ascertain readily the statutory and legal basis for the actions of the 1st Plaintiff and the Minister, Mr Havea submitted that the FAOC was granted to the 2nd Plaintiff under Regulation 175 (Restriction on Carriage for Hire or Reward by Foreign Aircraft or Foreign Controlled Aircraft) of the Civil Aviation Regulations 1992 (although it does not state that on its face) and revoked under Regulation 165 (Revocation, Suspension and Variation of Certificates, Licences and Other Documents) in accordance with the recently amended ?? Government of the Kingdom of Tonga Policy on Domestic Operations dated 30 July 2004 and "the non submission of a bid by Fly Niu Airlines". While unusually there appears to be no legislative provision for appeal against the Minister's decision in the body of the Regulations, a right of appeal within 14 days is provided in Civil Aviation Notice No 16 by the Director of Civil Aviation on Appeal Procedures Issue 2 dated 12 June 2003. That right of appeal is to the Board of Appeal appointed by the Minister.

However I must make it clear that I am not considering the substantive merits of the application at this stage. An interlocutory (or interim) injunction is one granted before trial for the purpose of preventing any change in the status quo from taking place until the final determination of the merits of the case: Judicial Review of Administrative Action para 17-008 (5th Ed 1995) by de Smith, Woolf & Jowell

Sufficient interest is the first and foremost consideration in relation to an application for leave to apply for judicial review; and it is a broad flexible concept. At that stage the applicant need only show that he has a prima facie or arguable case or reasonable grounds for believing that there has been a breach of a public duty: the court should not go into the matter in depth but should consider on a quick perusal of the material then available whether it discloses what might on further consideration turn out to be an arguable case for the grant of the relief claimed: IRC v National Federation of Self-Employed and Small Businesses Ltd [1981] UKHL 2; [1981] 2 All ER 93 at 105, 106 (HL). On that basis I was satisfied on the material available to me, involving an early revocation of a certificate before its expiry, that it disclosed what may turn out to be an arguable case: and so I exercised my discretion to grant leave to apply for judicial review.

The law on the matter of interlocutory injunctions is set out at Halsbury Vol 1(1) at para ??; Vol 24 paras 953-956; and Vol 37 at paras 570-572; and is encapsulated in American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] 1 All ER 504 (HL) and Attorney-General v Guardian Newspapers Ltd [1987] UKHL 13; [1987] 3 All ER 316 (HL); and also in Judicial Review of Administrative Action paras 17-008 - 17-015 (5th Ed 1995) by de Smith, Woolf & Jowell. It is also usefully summarised in Primary Produce Exports Ltd v Lauti 1995 TLR 162, in which reference is made to Cayne v Global Natural Resources plc [1984] 1 All ER 225, 237 (CA).

The test applied in determining whether or not to grant an interlocutory injunction in an application for judicial review is said to be broadly similar to that now applied in private law proceedings: de Smith para 17-009. In American Cyanamid it was said that the correct approach was to ask the following questions:

1. Has the plaintiff shown a serious issue to be tried, ie one for which there is some supporting material, of which the outcome is uncertain: per Cayne. The claim must not be frivolous or vexatious; and the plaintiff must have a real/reasonable ?? prospect of success. The aim is to avoid the court having to consider difficult questions of law or fact at the interlocutory stage.
   
2. The plaintiff must also show that damages would not be an adequate remedy or that the defendant could not pay damages.
   
3. The extent to which the disadvantages to each party would be incapable of being compensated in damages in the event of his succeeding at the trial is always a significant factor in assessing where the balance of convenience lies. H956.
   
2. The plaintiff must show either that damages would adequately compensate the defendant for any loss he may sustain by reason of the injunction being granted and that he can pay damages, or if he cannot show that, that the damage he himself would sustain if an injunction were not granted would exceed the damage that the defendant will sustain, or if the damage each sustains is equally balanced, that the defendant's conduct involves a change in the status quo.
   

The House of Lords emphasised that it would be a fruitless exercise for a judge to try and decide a case on incomplete evidence. In serious cases the balance of convenience between the parties is a more important consideration than the establishment of a prima facie case.

In relation to the question of an injunction, on the material before me I believe there is a serious issue to be tried, ie the claim is not frivolous or vexatious and discloses a reasonable prospect of success / a substantial question to be investigated ?? .

I then have to decide whether there is an adequate alternative remedy in damages. It has been submitted that there is a doubt about that, as the 1st Plaintiff's business will have to close, there will be loss of employment, the aircraft will have to be returned to New Zealand, and there may be damage to the tourism industry (though that is a side effect in relation to this case).

If there is doubt the court then has to consider the test of the balance of convenience (or the balance of the risk of doing an injustice, per Cayne v Global Natural Resources plc [1984] 1 All ER 225, 237 (CA)), looked at widely.

The 1st Defendant considers that there will be no hardship to the Ministry if an injunction is granted.

I consider that, given the relatively short notice given to the Plaintiffs of the decision to revoke the licence, that the balance of convenience lies in granting the injunction and quashing the revocation of it, albeit only to the date of expiry of the licence on 15 September. If the injunction is not granted there will be a substantially greater risk of injustice to the Plaintiffs. An injunction will at least permit the Plaintiffs to work towards the expiry of the licence on an orderly basis, and, although it is a side issue in this case, it will ease any difficulties caused to their present customers.

It will also give the Plaintiffs time to consider whether to appeal formally against the revocation.

In every case the judge has finally to stand back and ask himself where overall justice lies: Klissers Farmhouse Bakeries Ltd v Harvest Bakeries Ltd [1985] 2 NZLR 140 (CA).

I gave these reasons in outline on 17 August in view of the importance of doing so at the time in all the circumstances.

I therefore grant the injunction sought and with immediate effect quash the order of the Minister revoking the 2nd Plaintiff's FAOC as follows:

THE COURT ORDERS THAT:

1. It grants leave to the Plaintiffs to apply for judicial review.
   
2. It grants the injunction sought by the Plaintiffs and with immediate effect quashes the order of the Minister dated 13 August 2004 which with effect from 16 August 2004 revoked the 2nd Plaintiff's Foreign Air Operator Certificate No FAOC57567.
   

NUKU'ALOFA: 20 August 2004.

R M Webster MBE
Chief Justice

Note: A further chambers hearing was then fixed for 9.00 am
on Monday 6 September to consider further procedure.