Golobadana No 35 Ltd v Bank of South Pacific Limited (formerly Papua New Guinea Banking Corporation) (2002) N2309

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi J
• Judgment Date: 11 November 2002
• Court: National Court
• Citation: (2002) N2309
• Year: 2002
• Judgement Number: N2309

Full Title: Golobadana No 35 Ltd v Bank of South Pacific Limited (formerly Papua New Guinea Banking Corporation) (2002) N2309

National Court: Kandakasi J

Judgment Delivered: 11 November 2002

1 PRACTICE AND PROCEDURE—Application for interlocutory injunction—Applicant under an obligation to disclose all relevant facts and information before grant of injunction—A failure to disclose all relevant facts and or information may result in a lifting of an injunction or a refusal of an application for a continuity of injunctive orders obtained exparte.

2 INTERLOCUTORY INJUNCTION—Continuity of Interlocutory injunction obtained exparte—Principles governing grant or continuity of interim injunction considered—Not certain whether a serious question of law or fact to be determined raised in the proceedings—The balance of convenience not favouring continuity of injunctive orders—Failure to disclose all relevant facts detrimental to continuity of interlocutory injunction.

3 MORTGAGES—Mortgagee exercising right of possession—Entering into a lease and management agreement of property secured by mortgage—Issue over termination of management agreement made subject to mortgagee ceasing to exercise its powers under the mortgage—Mortgagee subsequently entering into deed of release, releasing secured property back to mortgagor without full recovery of amounts due under mortgage—Whether mortgagee entitled to give up possession to mortgagor prior to a full recovery of all amounts due and owing to it from the mortgagor—Whether a lease agreement or any other agreement between a mortgagee and a third party an impediment to a mortgagee giving up possession earlier—The relationship between a mortgagor and mortgagee takes precedence over any relationship between a third party particularly when the mortgagee has the right of redemption or earlier settlement of debts due and owing to the mortgagee—A third party having a valid agreement with a mortgagee may have a claim in damages for any breach of contract.

4 AGK Pacific (NG) Ltd v Anderson (2000) N2062, Markscal Limited and Robert Needham v Mineral Resources Development Company Pty Ltd and Orogen Mineral Pty Ltd and the Independent State of Papua New Guinea and Charles Lepani (OS 395/96) N1472, Mt Hagen Airport Hotel Pty Ltd v Gibbes [1976] PNGLR 216, Public Employees Association of Papua New Guinea v Napoleon Biyuwo Liosi and Public Services Commission [1988–89] PNGLR 585, Ning's Trading Pty Ltd v ANZ Banking Group (PNG) Ltd (1998) N1700, National Housing Corporation v Yama Security Services Pty Ltd (2000) N1985, American Cyanide Company v Ethicon Ltd [1975] 1 All ER 504, Smith v Inner London Education Authority [1978] 1 All ER 411 Nokes & Core Ltd v Rice [1902] AC 24, Seton v Played (1902) 7 verse Jun 265; ER 108, Marquess of Northhampton v Salt [1892] AC 1, Fairclough v Swan Brewery Co Ltd [1912] AC 565, Reeve v Lisle [1902] AC 461, Kreglinger v New Patagonia Meat & Cold Storage Stores Co Ltd [1914] AC 25, Knightsbridge Estates Trust Ltd v Byrne [1939] Ch 441, Booth v The Salvation Army Building Association (Limited) (1897) 14 TLR 3, Wanner v Caruana [1974] 2 NSWLR 301, Fitzgerald's Trustee v Mellersh [1892] 1 Ch 385, Crickmore v Freestone [1870] 40 LJ Ch 137, Four–Maids Ltd v Dudley Marshall (Properties) Ltd [1957] Ch 317, Noyes v Pollock (1886) 32 Ch D 53, Parkinson v Hanbury (1867) LR 2 HL 1, National Bank of Australia v The United Hand in Hand & Band of Hope Cor (1879) 4 App Cas 391, Lord Kensington v Bouverie (1855) 7 De GM & G 134; 44 ER 53, Fyfe v Smith (1975) 2 NSWLR 408, Sandon v Hooper (1843) 6 Beav 246; 49 E.R. 820 and Richards v Morgan (1753) 4 Y & C Ex 570; 160 ER 1136 referred to

___________________________

N2309

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS. NO. 1701 OF 2001

BETWEEN:

GOLOBADANA NO. 35 LTD

Plaintiff

AND:

BANK OF SOUTH PACIFIC LIMITED

(formerly Papua New Guinea Banking Corporation)

Defendant

WAIGANI: KANDAKASI, J.

2002: 25th October

11th November

PRACTICE AND PROCEDURE – Application for interlocutory injunction – Applicant under an obligation to disclose all relevant facts and information before grant of injunction – A failure to disclose all relevant facts and or information may result in a lifting of an injunction or a refusal of an application for a continuity of injunctive orders obtained exparte.

INTERLOCUTORY INJUNCTION – Continuity of Interlocutory injunction obtained exparte – Principles governing grant or continuity of interim injunction considered – Not certain whether a serious question of law or fact to be determined raised in the proceedings – The balance of convenience not favouring continuity of injunctive orders – Failure to disclose all relevant facts detrimental to continuity of interlocutory injunction.

MORTGAGES – Mortgagee exercising right of possession – Entering into a lease and management agreement of property secured by mortgage – Issue over termination of management agreement made subject to mortgagee ceasing to exercise its powers under the mortgage – Mortgagee subsequently entering into deed of release, releasing secured property back to mortgagor without full recovery of amounts due under mortgage – Whether mortgagee entitled to give up possession to mortgagor prior to a full recovery of all amounts due and owing to it from the mortgagor – Whether a lease agreement or any other agreement between a mortgagee and a third party an impediment to a mortgagee giving up possession earlier – The relationship between a mortgagor and mortgagee takes precedence over any relationship between a third party particularly when the mortgagee has the right of redemption or earlier settlement of debts due and owing to the mortgagee – A third party having a valid agreement with a mortgagee may have a claim in damages for any breach of contract.

Papua New Guinea Cases Cited:

AGK Pacific (NG) Ltd v. William Brad Anderson Karson Construction (PNG) Ltd & Downer Construction (PNG) Ltd (Unreported judgement delivered on 04/12/99 or 00) N2062.

Markeal Limited & Robert Needham v. Mineral Resources Development Co. Pty Ltd (Unreported judgement delivered on 05/09/96) N1472.

Mt. Hagen Airport v. Gibbs [1976] PNGLR 216.

Public Employees Association v. Public Service Commission [1988-89] PNGLR 585.

Ning’s Trading Pty Ltd v. ANZ Banking Group (PNG) Ltd (Unreported judgement delivered on 23/03/98) N1700.

National Housing Corporation v. Yama Security Services Pty Ltd (Unreported judgement delivered 25/08/00) N1985.

Overseas Cases Cited:

American Cyanide Company v. Ethicon Limited (1975) 1 All E.R. 504.

Smith v. Inner London Education Authority (1978) 1 All E.R. 411 at 419.;

Nokes & Core Ltd v. Rice [1902] A.C. 24, at p. 30.

Seton v. Played (1902) 7 verse Jun. 265, at 273; E.R. 108, at 111.

Marquess of Northhampton v. Salt [1892] A.C. 1.

Fairclough v. Swan Brewery Co. Ltd [1912] A.C. 565, at. pp. 570.

Reeve v. Lesly [1902] A.C. 461.

Kreglinger v. New Patagonia Meat & Cold Storage Stores Co. Ltd. [1914] A.C. 25, at pp. 53-53.

Knightsbridge Estates Trust Ltd v. Byrne [1939] Ch. 441.

Booth v. The Salvation Army Building Association (Limited) (1897) 14 T.L.R. 3.

Wanner v. Caruana [1974] 2 N.S.W.L.R. 301, at pp. 306.

Fitzgerald’s Trustee v. Mellersh [1892] 1 Ch. 385 at pp. 389-390.

Crickmore v. Freestone [1870] 40 L.J. Ch. 137.

Four—Mates Ltd v. Dudley Marshall (Properties) Ltd [1957] Ch. 317, at p. 32.

Noiyes v. Pollock (1886) 32 Ch. D. 53.

Parkinson v. Hanbury (1867) L.R. 2 H.L. 1, at p.15.

National Bank of Australia v. The United Hand in Hand & Band of Hope Cor. (1879) 4 APP. CAS. 391, at p.409.

Lord Kensington v. Bouverie (1855) 7 De G.M. & G. 134, at p. 157; 44 E.R. 53, at p.62.

Fyfe v. Smith (1975) 2 N.S.W.L.R. 408.

Sandon v. Hooper (1843) 6 Beav. 246; 49 E.R. 820.

Richards v. Morgan (1853) 4 Y & C.Dx 570; 160 E.R. 1136.

Texts Cited:

E.A. Francis & K.J. Thomas, Mortgages and Securities, 3rd Edition, Sydney, 1986, pp. 88-149.

E.L.G. Tyler, Law of Mortgage, 10th Edition, Butterworth London, 1988.

Supreme Court Registrar to Alexander Dawson Inc. [1976] 1 N.Z.L.R. 612 at p.627.

Counsel:

Mr. I. Molloy & Ms. A. Tupou for the Plaintiff

Mr. S. Nutley for the Defendant

11TH NOVEMBER 2002

KANDAKASI J: This is an application by notice of motion by the plaintiff for the continuation of an interlocutory injunction (injunction) granted by me exparte the defendant (the Bank) on 18th October 2002 with the Bank...