Milupol Development Corporation Limited and Cakara Alam (PNG) Limited v Paul Garai (2012) N4635

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 28 February 2012
• Citation: (2012) N4635
• Docket Number: WS 139 of 2011
• Court: National Court
• Year: 2012
• Judgement Number: N4635

Full Title: WS 139 of 2011; Milupol Development Corporation Limited and Cakara Alam (PNG) Limited v Paul Garai (2012) N4635

National Court: Hartshorn J

Judgment Delivered: 28 February 2012

N4635

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 139 OF 2011

BETWEEN:

MILUPOL DEVELOPMENT

CORPORATION LIMITED

First Plaintiff

AND:

CAKARA ALAM (PNG) LIMITED

Second Plaintiff

AND:

PAUL GARAI

Defendant/Contemnor

Waigani: Hartshorn J.

2011:11 November,

2012: 8th, 17th and 28th February

Contempt - penalty

Facts:

The contemnor Mr. Paul Garai, after a trial, was found guilty of contempt of court in that he wilfully breached terms of a Restraining Order of this Court.

Held:

1. The appropriate penalty is a fine with imprisonment being the default penalty.

2. Mr. Garai shall pay a fine of K 17,000. If payment of that fine is not made within thirty days from today, then Mr. Garai shall be imprisoned for a period of six months.

Cases cited:

Papua New Guinea Cases

Yap v. Tan [1987] PNGLR 227

Bishop Brothers v. Ross Bishop (1989) N690

Ross Bishop v. Bishop Brothers [1988-89] PNGLR 533

Concord Pacific Ltd v. Thomas Nen [2000] PNGLR 47

Liriope v. Usurup (2009) N3931

Bank of South Pacific Ltd v. Anton Sekum & Ors (2011) N4588

Overseas Cases

Australian Meat Industry Employees Union v. Mudginberri Station Pty Ltd (1986) 161 CLR 98

Witham v. Holloway (1995) 183 CLR 525

Counsel:

Mr. F. Griffin, for the Plaintiffs

Mr. G. Kaore, for the Defendant/Contemnor

28th February, 2012

1. HARTSHORN J: The contemnor Mr. Paul Garai, after a trial, was found guilty of contempt of court. Mr. Garai wilfully breached paragraphs one and two of the orders of this court dated the 17th May 2011 (Restraining Orders) which are:

“1. The Defendant, his agents, servants or whosoever otherwise are restrained forthwith from threatening, disturbing, interfering and preventing the Plaintiffs from conducting their logging operations within the West Arowe Timber Resource Project Area in West New Britain Province, until the hearing and determination of this proceeding.

2. The Defendant, his agents, servants or whosoever otherwise are restrained forthwith from holding himself out as a director, shareholder or officer of Milupol Development Corporation Ltd, until the hearing and determination of this proceeding.”

2. The facts are detailed in my decision delivered on 8th February 2012. I heard submissions on penalty from counsel for the plaintiffs, and counsel for Mr. Garai after Mr. Garai informed the court that his counsel would make submissions on his behalf.

3. No maximum punishment is prescribed for contempt. Pursuant to Order 14 Rule 49 (1) National Court Rules, where the contemnor is not a corporation, the court may punish contempt by committal to prison or fine or both.

4. The category of contempt of which Mr. Garai has been found guilty is referred to as disobedience contempt. That is, the failure to comply with an order of the court or an undertaking given to a court. The punishments that have been imposed in this jurisdiction for disobedience contempt were considered by Cannings J in Liriope v. Usurup (2009) N3931. Cannings J noted that in four of the seven cases considered, the primary punishment was committal to custody and in two cases, Yap v. Tan [1987] PNGLR 227 and Bishop Brothers v. Ross Bishop (1989) N690 (appeal against conviction upheld: Ross Bishop v. Bishop Brothers [1988-89] PNGLR 533), committal to custody was the default penalty. In Yap (supra) and Bishop (supra), where fines were imposed with committal to custody being the default penalty, the contempts were in relation to the operation of businesses. In the case of Concord Pacific Ltd v. Thomas Nen [2000] PNGLR 47 in which the contempt was business related, the punishment was an order for costs on a solicitor client basis against the contemnor.

5. Then in Bank of South Pacific Ltd v. Anton Sekum & Ors (2011) N4588, I sentenced the contemnor who had been found guilty of a disobedience contempt that was business related, to a fine and imprisonment if not paid within thirty days, and costs to be paid on a solicitor client basis.

6. As I said in Anton Sekum (supra):

“The punishment of a fine with or without a default penalty and an order for the payment of costs, to an extent, reflects the punishment that was imposed for disobedience contempt historically. This was referred to in Australian Consolidated Press Ltd v. Morgan (1965) 112 CLR 483 by Windeyer J:

“When contempt lies in disobedience of a court’s order to do something, the contemnor may be imprisoned, until by doing what was ordered he purges his contempt. When contempt lies in disobedience of an injunction not to do something, the contemnor is ordinarily permitted to purge his contempt by an apology to the court, making reparation for the damage done by the forbidden act and paying the costs as between solicitor and client.”

The imposition of a fine, which was not permitted in earlier times, can be seen to have replaced the making of reparations in the passage cited.

The payment of a fine with or without imprisonment as the default penalty is often the punishment for disobedience contempt imposed in the courts of Australia. The Federal and High Courts of Australia have the power to order that a contemnor, “pay a fine, be committed to prison or both pay a fine and be committed to prison.” The decisions of these Courts are persuasive in this jurisdiction.

In the recent case of Vaysman v. Deckers Outdoor Corporation Inc [2011] FCAFC 17, a decision of the Full Court of the Federal Court of Australia, Gray J said that:

“The starting point for the process of reasoning in sentencing is the gravity of the offence… In the case of contempt of court involving contravention of, or failure to comply with, court orders, that means assessing the seriousness of the defiance of the Courts authority.”

Then later,

“… Restraint is appropriate in imposing sentences of imprisonment for contempt of court involving contravention of, or failure to comply with, orders of the Court. The authority of a court can be brought into disrepute, rather than enhanced, by too great a tendency to punish severely in cases that do not warrant severity.”

In the judgment of Bromberg J in Vaysman (supra), His Honour had this to say as to punishment for contempt:

“…. The question is whether by reference to the harm done, the seriousness of the contempt, any prior relevant misconduct and the physical, mental and other personal conditions of the person to be sentenced, no sentence other than imprisonment is (in all the circumstances) appropriate.” “… non-compliance with court orders necessarily constitutes an interference with the administration of justice and thus the public interest of vindicating judicial authority is raised….” “The vindication of judicial authority must necessarily reflect the nature of the challenge to that authority inflicted by the conduct in contempt in question.” “Imprisonment, as a disciplinary sanction for contempt, ought to be confined to the most serious of contempts..” “As Keane CJ, Dowsett and Reeves JJ recently observed in Jones v. Australian Competition and Consumer Commission [2010] FCAFC 136 at [36], there would be a serious question of the propriety of a sentence of imprisonment if the charges raised only a case of civil contempt; that is, a case where contumacious conduct was not contended for.””

7. In this instance, I have found that Mr. Garai disobeyed the Restraining Orders by writing a letter that by its content, threatened, disturbed and interfered with the plaintiffs’ logging operations within the West Arowe Timber Resource Project Area and by holding himself out as a director or officer of Milupol Development Corporation Ltd by holding himself out as its Chairman. I concluded that Mr. Garai’s actions were wilful as he wrote the subject letter three days after he had been personally served with the Restraining Orders.

8. Counsel for the plaintiffs submitted that Mr. Garai’s actions were not only wilful, but were belligerent, recalcitrant and contumacious and as such should be punished with a term of imprisonment of up to two years. Counsel also made reference to s. 206 Criminal Code which prescribes a term of imprisonment not exceeding one year for the misdemeanour of disobeying a lawful order issued by a court, without lawful excuse.

9. Counsel for Mr. Garai submitted that this court should pardon Mr. Garai’s actions or be lenient in its sentencing as:

a) Mr. Garai was not acting in his own interests but those of forest resource owners who were...