Gobe Hongu Limited v The National Executive Council, The Independent State of Papua New Guinea, Barclay Bros (PNG) Limited and Southern Highlands Gulf Highway Limited (1999) N1920

• Jurisdiction: Papua New Guinea
• Judge: Sevua J
• Judgment Date: 08 June 1999
• Court: National Court
• Citation: (1999) N1920
• Year: 1999
• Judgement Number: N1920

National Court: Sevua J

Judgment Delivered: 8 June 1999

N1920

PAPUA NEW GUINEA

[National Court of Justice]

WS 491 of 1999

BETWEEN: GOBE HONGU LIMITED

Plaintiff

AND: THE NATIONAL EXECUTIVE

COUNCIL

First Defendant

AND: THE INDEPENDENT STATE OF

PAPUA NEW GUINEA

Second Defendant

AND: BARCLAY BROS (PNG) LIMITED

Third Defendant

AND: SOUTHERN HIGHLANDS GULF

HIGHWAY LIMITED

Fourth Defendant

Waigani: Sevua, J

1999: 18th May & 2nd & 8th June

Civil – Practice and Procedure – Interlocutory Injunction – Application for – Proper principles reaffirmed.

CASES REFERRED TO:

* JF Stratford & Son Limited -v- Lindley [1964] 3 All ER 102.

* American Cyanamid Co. -v- Ethicon Ltd [1975] AC 396.

* Employers Federation of Papua New Guinea -v- Papua New Guinea Waterside & Seamens Union & Lawrence Titimur & Ors (N393, 11th October, 1993, unreported).

* Craftworks Niugini Pty Ltd -v- Allan Mott (SC 527, 27th June, 1997, unreported).

* Haro Yamis -v- Viviso Seravo, Minister for Lands & Ors (WS 713/98, unnumbered & unreported, 9th November, 1998).

* Norah Mairi -v- Alkan Tololo & Ors [1976] PNGLR 59.

* Mt. Hagen Airport Hotel Pty Ltd -v- Gibbes & Anor [1976] PNGLR 216.

* Mauga Logging Company Ltd -v- South Pacific Oil Palm [1977] PNGLR 80.

* Robinson -v- National Airline Commission [1983] PNGLR 476.

R. Saulep for Plaintiff

R. Pato for 1st & 2nd Defendants

D. Lightfoot for 3rd Defendant

G. Sheppard for 4th Defendant

8th June, 1999

INTERLOCUTORY JUDGMENT

SEVUA, J: The plaintiff, in its writ of summons filed on 17th May, 1999; claimed contractual losses amounting to K337.5m, third party contractual losses, punitive damages, interest and costs. There is a amended writ of summons which was filed on 28th May, however, for the purpose of this judgment, it is not relevant because, the interim injunctive orders granted by this Court on 18th May, was in respect of the original writ. The amended writ was filed subsequent to the grant of interim injunction.

In essence, the plaintiff’s claim alleged “breach of promise or undertaking” by the defendants.

I have highlighted the words “breach of promise or undertaking” in this judgment because those were in the words of the plaintiff’s counsel, and to this Court, they are pertinent. I will revert to this point later.

When this matter initially came before me on 18th May, the application for interim injunction was made ex parte. The interim orders were therefore granted ex parte. At the outset, I wish to reiterate one aspect of this application. When the application was made ex parte, I expressed my reservation about this application. I considered that, one of the fundamental principles in granting interim injunctions, the balance of convenience, did not favour the plaintiff then. I will address that issue later, now that the Court has had the benefit of full arguments and I will refer to counsel’s submissions later.

The law on the grant of interim injunctions is clear and is well settled in our jurisdiction. There are many case laws on it which I do not intend to canvass. For my purpose, I may only cite a few of these authorities to highlight what I wish to emphasise in this judgment. I should, at this juncture, thank counsel for their assistance in preparing written submissions.

Counsel for the third defendant, Mr Lightfoot has argued several matters extensively, assisted by Mr Sheppard, counsel for the fourth defendant. These submissions are quite helpful, however, I do not propose to canvass all these arguments. Where necessary, I will refer to parts of these submissions including the plaintiff’s counsel’s submissions.

As I alluded to a little earlier, the law on interim injunctions has been settled in Papua New Guinea. An application for interim injunction is required to establish a number of matters to satisfy the Court before the Court grants an interim injunction.

The relevant principles, since the House of Lord’s decision in JT Stratford & Son Limited -v- Lindley [1964] 3 All ER 102; are laid down in American Cyanamid Co. -v- Ethicon Ltd [1975] AC 396; which has been adopted as part of the underlying law in this jurisdiction. These principles are set out by Kapi, DCJ in Employers Federation of Papua New Guinea -v- Papua New Guinea Waterside Workers & Seamens Union & Lawrence Titimur & Ors (N.393, 11th October, 1993, unreported). The Supreme Court in Craftswork Niugini Pty Ltd -v- Allan Mott, (SC 525, 27th June, 1997, unreported) cited these principles. Those are the principles applicable to an application for interim injunction in this jurisdiction. I referred to these principles recently in Haro Yamis -v- Viviso Seravo, Minister for Lands & Ors, (WS 713/98, unreported, unnumbered, 9th November, 1998). I reaffirm those principles as the relevant principles applicable.

In JT Stratford (supra) the House of Lords stated the principle to be this, an applicant seeking an interlocutory injunction must establish a prima facie case. However, the House of Lords reconsidered that principle and expanded on it in American Cyanamid (supra) and since then, the principles have had good reception in this jurisdiction. Apart from Craftworks Niugini Pty Ltd (supra), the following are some of the cases soon after Independence which adopted these principles: Norah Mairi -v- Alkan Tololo & Ors [1976] PNGLR 59; Mt Hagen Airport Pty Ltd -v- Gibbes & Anor [1976] PNGLR 216; Mauga Logging Company Ltd -v- South Pacific Oil Palm [1977] PNGLR 80.

The relevant principles established in Employers Federation of Papua New Guinea (supra) are:

“1. Is there action not frivolous or vexatious?

Is there a serious question to be tried?

Is there a real prospect that the applicant will succeed in the claim for an injunction at the trial?

All these questions laid down the same test. See Smith -v- Inner London Education Authority [1978] 1 All ER 411 at 419.

2. The Court must then consider whether the balance of convenience lies in favour of granting or refusing interlocutory relief.

3. As to the balance of convenience, the Court should first consider whether if the applicant succeeds, he would be adequately compensated by damages for the loss sustained between the application and the trial, in which case no interlocutory injunction should normally be granted.

4. If damages would not provide an adequate remedy, the Court should then consider whether if the applicant fails, the defendant would be adequately compensated under the applicant’s undertaking in damages, in which case there would be no reasons on this ground to refuse an interlocutory injunction.

5. Then one goes on to consider all the other matters relevant to the balance of convenience, an important factor in the balance should, other thing been even, preserve the status quo; and

6. When all other things are equal, it may be proper to take into account in tipping the balance, relative strength of each party’s case as reviewed by the evidence before the Court hearing the interlocutory application.

Having stated the law, let me now consider the plaintiff’s application.

Firstly, I have already adverted to the remedies the plaintiff is seeking in this action. Those remedies do not include a claim for an injunction.

It is trite law that a party is not entitled to a remedy he has not pleaded in his claim. In this case, the plaintiff has not claimed an injunction in its statement of claim. I must confess I did not realise this at the time the application was made, and counsel for the plaintiff did not disclose this fact either. Had I known about it, the application may not have been granted. I think it was Mr Lightfoot who raised this issue on 2nd June when the application was fully argued. Now that I have had the benefit of full arguments by all parties, I have reconsidered my position and I am of the view that the interim injunction should not have been granted then, because the plaintiff did not claim it as a relief.

Secondly, there was no undertaking as to damages. The plaintiff’s counsel submitted that the plaintiff had filed an undertaking as to costs which include damages. I do not accept that submission. The undertaking filed on 18th May which is document no. 4 in the Court file, is an undertaking as to costs, not damages. The undertaking reads, “I, Leslie Umai Ope, Chaiman of Gobe Hongu Limited, of Port Moresby, Box 66, Mendi, Southern Highlands Province, make an undertaking as to the reasonable costs of the Defendants necessary arising out of this application……”(my emphasis). The plaintiff filed an amended undertaking on 28th May, but that is not relevant to the application made on 18th May, in any event, it is also an undertaking as to costs, not damages.

The usual undertaking as to damages is a condition precedent to the granting of an interlocutory injunction. Such undertaking must therefore be given by the applicant at the time of making the application, ie. filed at the time of, or prior to the making of the application. The usual undertaking as to damages is given by a plaintiff who applies for an interlocutory injunction . It is a condition for obtaining...