Livestock Development Corporation Limited v Rural Development Bank Limited and Raga-Kavana - Registrar of Titles and Niugini Properties Limited (2008) SC923

• Jurisdiction: Papua New Guinea
• Judge: Davani J
• Judgment Date: 04 March 2008
• Court: Supreme Court
• Citation: (2008) SC923
• Docket Number: SCA NO. 6 OF 2008
• Year: 2008
• Judgement Number: SC923

Full Title: SCA NO. 6 OF 2008; Livestock Development Corporation Limited v Rural Development Bank Limited and Raga-Kavana - Registrar of Titles and Niugini Properties Limited (2008) SC923

Supreme Court: Davani J

Judgment Delivered: 4th March 2008

SC923

PAPUA NEW GUINEA

[IN THE SUPREME COURT OF JUSTICE]

SCA NO. 6 OF 2008

BETWEEN:

LIVESTOCK DEVELOPMENT CORPORATION LIMITED

Appellant/applicant

AND:

RURAL DEVELOPMENT BANK LIMITED

First Respondent

AND:

RAGA KAVANA – REGISTRAR OF TITLES

Second Respondent

AND:

NIUGINI PROPERTIES LIMITED

Third Respondent

Waigani: Davani .J

2008: 3rd, 4th March

SUPREME COURT – Practice and Procedure – application for interim restraining orders – same orders sought as in court below – jurisdiction and powers of a single judge of the Supreme Court. Section 5 (1) (b) of Supreme Court Act.

SUPREME COURT – Practice and Procedure – Undertaking refiled – Undertaking refused in court below – akin to introduction of fresh evidence – abuse.

Facts

Applicant filed originating summons seeking various declaratory orders, generally to have Contract of Sale between the first and third respondents, declared invalid. The Contract involved sale of land where the first respondent exercised its power of sale as mortgagee to sell to the third respondent. The applicant applied for interim injunctive orders in the National Court which were refused. It appealed to the Supreme Court against that refusal.

On the Supreme Court appeal, it filed an application to restrain the third respondent, similar orders it sought in the National Court, which were refused.

Held

1. A single judge of the Supreme Court cannot grant orders that would effectively determine the appeal, a power that rests only with a full Supreme Court Bench.

2. The applicant cannot correct and rely on an Undertaking as to Damages which was refused in the court below and which it now seeks to rely on in seeking these orders. The applicant is effectively relying on fresh evidence, which can only be done by way of application. That is an abuse of process.

Cases cited

Avia Aihi v the State [1981] PNGLR 81;

Leytrac Pty Limited v. the Independent State of Papua New Guinea [1982] PNGLR 148;

Bill Skate and Peter O’Neil v Jeffrey Nape, speaker of Parliament (2004) SC 754;

Wau Ecology Institution v Registrar of Companies (2005) SC 794;

National Superannuation Fund Ltd v Pacific Equities and Investments Ltd and 2 others (2006) SC 845;

Counsel

J. Nandape, for appellant/applicant

R. Bradshaw, for the first respondent

K. Gamoga, for third respondent

Second respondent did not appear

DECISION

4 March, 2008

1. DAVANI .J: The application comes before me sitting as a single judge of the Supreme Court, amended application filed by Mawa Lawyers on 28th February, 2008, which seeks the following orders;

“(a) That pursuant to Section 5 (1) (b) of the Supreme Court Act and/or Section 155 (3) and (4) of the Constitution, the Third Respondent be restrained from entering onto and dealing with the property described as Portion 5, Milinch, Lae Morobe Province comprising State Lease Volume 126, Folio 229 pending the determination of the appeal and the National Court proceeding described as Os No.4 of 2008.

(b) That pursuant to Section 5 (1) (b) of the Supreme Court Act and/or Section 155(3) and (4) of the Constitution, the Third Respondent be restrained from evicting the employees of the Appellant residing on the property described as Portion 5, Milinch, Lae Morobe Province pending the determination of the appeal and the National Court proceeding described as OS 4 of 2008.

(c) That pursuant to Section 5 (1) (b) of the Supreme Court Act and/or Section 155(3) and (4) of the Constitution, the Third Respondent be restrained from entering into a contract for sale with a third party or entering into any form of agreement or negotiation with a third party with a view of transferring the title of the property described as Portion 5, Milinch Lae Morobe Province pending the determination of this appeal and the National Court proceeding described as OS No. 4 of 2008.

(d) That pursuant to section 5 (ii) (b) of the Supreme Court Act the National Court proceedings described as OS No.4 of 2008 be stayed pending the determination of the appeal herein.

(e) Cost of the Application be paid by the Second and Third Respondents.

(f) That the time for entry of these orders be abridged to the time of settlement by the Registrar which shall take place forthwith.”

(g) Any other or further orders as this Honourable Court deems fit.

2. The application is opposed by the first and third respondents. The second respondent did not appear.

Background

3. The substantive proceeding in the National Court is an originating summons filed on 11th January, 2008. The orders sought are in the nature of declarations, being;

1. The loan agreement executed by the third respondent Livestock Development Corporation Ltd (LDC) and the then Rural Development Bank, presently known as the National Development Bank Ltd (NDB) be declared illegal and void for breaching the provisions of Companies Act 1997 and the LDC’s constitution.

2. The basis for seeking these declarations are that;

- Persons signing on behalf of the LDC did not have the authority nor was there any resolution from the Board of Directors of the LDC.

- The loan agreement was not sealed with the LDC’s common seal.

- The loan agreement was not witnessed.

- The loan application was made 8 days after the loan had been approved, being quite irregular.

4. On the substantive proceedings, the applicant filed a notice of motion seeking injunctive orders. This motion for injunctive orders was heard by the National Court on 11th February, 2008 which was subsequently refused on 12th January, 2008.

5. The land the subject of the proceedings is Portion 5 Milinch Lae fourmil Markham in the Morobe province (the property). It houses an abattoir and other dwellings.

6. The application arises as a result of a mortgagee sale conducted by the NDB after it sold the property to the third respondent. The present status of the sale is that the third respondent through the second respondent has registered the transfer of title of the property, to the title deed. I have heard from Mr Bradshaw that the NDB’s interests as mortgagee will also be registered on the title very shortly.

7. The mortgagee sale arose because the LDC failed to repay principal loan of K460,000.00 together with interest, which loan it applied for on 24th March, 2003 and which was approved on 6th May, 2003. The NDB submits that the mortgagee sale was conducted because since the LDC’s receipt of the loan in 2003 up to late 2007, the LDC has not made a single repayment to the NDB. (See affidavit of Hubert Namani, lawyer and company secretary for first respondent sworn on 18th February, 2008 and filed on 19th February, 2008.)

The Supreme Court appeal

8. The appeal filed by the applicant, relates to the refusal by the trial judge to make the interim injunctive orders that it sought. The appeal filed on 14th February, 2008 was filed together with application for interim injunctive orders pending the determination of the appeal. This was followed by the amended application which was filed on 28th February, 2008.

9. On perusing the notice of appeal, the extensive grounds of appeal relate basically to the refusal to grant the interlocutory interim injunction. It is based on this appeal, that the applicant now seeks orders restraining the second and third respondents from taking any further steps.

This application

10. Ms Nandape moves for orders pursuant to s. 5 (1) (b) of the Supreme Court Act and/or s. 155 (3) and (4) of the Constitution. Section 5 (1) (a) – (e) of the Supreme Court Act reads;

“5. Incidental directions and interim orders.

(1) Where an appeal is pending before the Supreme Court—

(a) a direction not involving the decision on the appeal; or

(b) an interim order to prevent prejudice to the claims of the parties; or

(c) an order in any proceedings (other than criminal proceedings) for security for costs; or

(d) an order dismissing an appeal in any proceedings (other than criminal proceedings) for default in furnishing security; or

(e) an order admitting an appellant to bail,

may be made by a Judge.”

11. Section 155 (3) (4) of the Constitution reads;

“(3) The National Court—

(a) has an inherent power to review any exercise of judicial authority; and

(b) has such other jurisdiction and powers as are conferred on it by this Constitution or any law,

except where—

(c) jurisdiction is conferred upon the Supreme Court to the exclusion of the National Court; or

(d) the Supreme Court assumes jurisdiction under Subsection (4); or

(e) the power of review is removed or restricted by a Constitutional Law or an Act of the Parliament.

(4) Both the Supreme Court and the National Court have an inherent power to make, in such circumstances as seem to them proper, orders in the nature of prerogative writs and such other orders as are necessary to do justice in the circumstances of a particular case.”

12. Ms Nandape urges the court to grant the restraining orders to maintain the status quo. She submits that it is important this interim injunction remain in place to allow the National Court proceedings to progress because the issue of the validity of the contract of sale entered into by the parties must be properly determined. The...