21 ILGS Gobe Project Area Inc Land Groups (as per the Ministerial Determination and attached as Schedule "A" to this writ) v Minerals Resources Development Company Limited and Petroleum Resources Gobe Limited and Bernard Pawih (as the Acting Secretary Department of Petroleum and Energy) (2006) N3066

• Jurisdiction: Papua New Guinea
• Judge: 11 July 2006
• Judgment Date: 11 July 2006
• Court: National Court
• Citation: (2006) N3066
• Docket Number: WS No. 1027 of 2005
• Year: 2006
• Judgement Number: N3066

Full Title: WS No. 1027 of 2005; 21 ILGS Gobe Project Area Inc Land Groups (as per the Ministerial Determination and attached as Schedule "A" to this writ) v Minerals Resources Development Company Limited and Petroleum Resources Gobe Limited and Bernard Pawih (as the Acting Secretary Department of Petroleum and Energy) (2006) N3066

National Court: 11 July 2006

Judgment Delivered: Lay J

N3066

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS No. 1027 of 2005

BETWEEN:

21 ILGS GOBE PROJECT AREA INC. LAND GROUPS as per the Ministerial Determination and attached as schedule "A" to this writ

Plaintiff

AND:

MINERALS RESOURCES DEVELOPMENT COMPANY LIMITED

Second Defendant

AND:

PETROLEUM RESOURCES GOBE LIMITED

Third Defendant

AND:

BERNARD PAWIH, AS THE ACTING SECRETARY DEPARTMENT OF PETROLEUM AND ENERGY

Fourth Defendant/Contemnor

Waigani: Lay J.

2006: 29 May and 11July

RULING ON APPLICATION TO HOLD THE FOURTH DEFENDANT IN CONTEMPT OF COURT ORDERS

PRACTICE AND PROCEDURE- contempt of court- National Court Rules 0.14 Div.6-O.12 r. 4 meaning-failure to stipulate a time for compliance with order in breach of 0.12 r.4- whether order ambiguous-whether order unenforceable-whether breach of order wilful.

Cases Cited

Ross Bishop and others v Bishop Brothers Engineering and Pty. Ltd. [1998-89] PNGLR 533;

Yap v Tan and B & T Engineering Pty. Ltd and Wong and Baptiste and Tau [1987] PNGLR 227;

In Re Mileage Conference Group of the Tyre Manufacturers Conference Ltd.’s Agreement [1966] 1 WLR 1137 at 1162D-E;.

Gilbert v Endean (1878) 9 Ch D 259 and Carter v Roberts [1903] 2 Ch 312;

Hitachi Sales (U.K.) v Mitsui Lines [1986] 2 Lloyd’s Rep. 574 C.A.).

Counsel

Peter Donigi, for the Plaintiffs

P. Korowi, for the Fourth Defendant

Facts

The substantive action is for orders to prevent royalties being paid to the Second Defendant on the basis that there were serious anomalies with respect to the administration of its trust funds. The Plaintiffs brought proceedings against the Fourth Respondent alleging he was in contempt of two orders of the Court. On 4 August 2005 the Court ordered that certain moneys held under the control of the Fourth Defendant be paid into Court by 9 August 2005. This was not done. All of the parties by their counsel agreed to withhold the money from Court. In a second order made 21 December 2005 the Court ordered that 40 percent of those moneys be paid to the Plaintiffs, which was done. The Plaintiffs wrote to the Fourth Defendant requiring the balance of 60 percent to be paid into Court in compliance with the order of 4 August 2005. The Fourth Defendant paid this money to the Second Defendant; he said under a genuine understanding that was what the second order of the Court required. Paragraph 1 of the second order also required certain other money to be paid to the Plaintiffs which has not been done, but no time for obeying the order was included in its terms. The money had not been paid but arrangements were being made for its payment.

Held

The Fourth Defendant has been represented by counsel who took no issue with the absence of his client, therefore the Fourth Defendant has consented to the matter proceeding in his absence: See Constitution s.37.

There being an agreement between the parties’ counsel not to pay money into Court in compliance with the order, the initial failure to comply with the order entered on 9August 2004 was not a willful breach and hence the Fourth Defendant was not guilty of contempt in respect of that matter.

The Fourth Defendant’s claim that he understood the second order to be a complete substitution for the first order was not reasonable, logical or believable. The Fourth Defendant willfully paid the 60percent of the money referred to in the order of 9 August 2005 and paragraph 2 of the order of 21 December 2005 to the Second Defendant in breach of the order of 9 August 2005. That the Defendant acted on legal advice is not a defence. He is guilty of contempt of court in respect of that failure to obey the order. The Fourth Defendant will be heard on penalty.

The Fourth Defendant could not be held in contempt for failing to pay the money referred to in paragraph 1 of the second order because the order’s requirements were uncertain, there being no time stipulated for complying with the order.

An order requiring the doing of an act which does not specify a date or period by which the act is to be performed is generally unenforceable. There are exceptions to this rule, such as where the party to perform the order deliberately puts it beyond his power to comply with the order after it is made.

An order required by O.12 r.4 to specify a time for its performance, which does not do so might be set aside on that ground.

Failure to stipulate a time for compliance with paragraph 1 of the second order is a breach of O.12 r.4 which requires the period of 14 days to be inserted in an order requiring a person to do an act, if the Court does not stipulate a time limitation. The Registrar should not settle such an order if it does not contain a time stipulation, except in case dealing with possession of land or delivery of goods.

11 July, 2006

1. LAY J.: By a Statement of Charge filed on 25 April 2006 and served on the Contemnor on 28 April 2006, the Plaintiffs seek to have the Fourth Defendant held in contempt of certain orders of the court.

2. On the 4 of August 2005 and entered on the 9 of August 2005 the court ordered as follows:

The court orders that:

1. All the royalty funds the subject of the Originating Summons No. 202 2005 held by the Department of Petroleum and Energy be paid into the National Court Trust Account by or before close of business on Tuesday 9 August 2005.

2. All pending applications relating to this proceeding and proceedings in Originating Summons No. 202 of 2005 are adjourned to Thursday 11 August 2005 at 9:30am.

3. On 21 December 2005, entered 21 of December 2005 the court ordered by consent that:

1. Pending determination of the proceedings herein, the outstanding accumulated royalty for the period between 31 of October 2004 to 31 October 2005 be paid to the incorporated land groups (ILGS) in the 40-60 percentage proportion in accordance with section 176 of the Oil & Gas Act 1998.

2. The order of 4 August 2005 for the payment of the sum of K 4 million into the National Court Trust Account is varied to enable 40 percent payment to the Incorporated Land Group in accordance with section 176 of the Oil & Gas Act 1998.

3. Any party to these proceedings is at liberty to apply for variation of these orders on seven (7) days notice to all parties.

4. The substantive proceedings were commenced by the Plaintiffs to prevent moneys held in trust for them by the Fourth Defendant from being paid to the Second Defendant, on the basis that a Court ordered audit report into the management of trust funds held by the Second Defendant disclosed serious anomalies in their management.

5. The Statement of Charge reads in part:

“The Contemnor is charged that he failed to comply with the Court Order of the 4 of August 2005 and 21 December 2005 where in he failed:

1. To immediately advise the Finance and Treasury Department to raise a cheque in the amount of K 4,968,800 to be paid directly to the National Court Trust Account.

2. To advise the Department of Petroleum and Energy to raise only one cheque in the sum of K 4,968,800 to be paid directly to the National Court Trust Account.

3. That despite the terms of the Court Order of the 4 of August 2005 and 21 December 2005 the Contemnor in his authority and knowledge raised a cheque in the sum of K 761,800 and paid to Imawe Bogasi Inc. Land Group. This in direct contravention and contempt of the said Court Order.

4. Despite insistence by the Plaintiffs for the Contemnor to pay the funds into the National Court Trust Account, the Contemnor intentionally and deliberately held on to the outstanding royalties the subject of the Originating Summons No. 202 of 2005 and continued to hold on to the royalties even to the date of this application.”

6. The Fourth Defendant did not comply with the order of 4 August 2005. A cheque for the amount of K4.1 million was raised in favour of the National Court Trust Account on 5 October 2005. This cheque was withheld by counsel for the Fourth Defendant by agreement with the other parties counsel. This was allegedly to prevent the amount becoming subject to outstanding garnishee notices in favour of third party creditors of the Plaintiffs.

7. The Fourth Defendant did comply with paragraph 2 of the order of 21 December 2005. However, the Fourth Defendant then went on to pay to the Second Defendant the 60percent balance of the K4.1 million.

8. On the 10 of May 2006 the Fourth Defendant wrote to the Secretary, Department of Finance and Treasury requesting that cheques be raised to comply with the requirements of paragraph 1 of the order of 21 December 2005. At the time of hearing this order had not been complied with.

9. Counsel for the Plaintiffs relied upon the affidavits of Joe David sworn 5 July 2005, two of 25 April 2006 and another of 3 May 2006. Counsel for the Fourth Defendant relied upon the affidavits of himself sworn 18 May 2006 and of the Fourth Defendant sworn 23...