Mobil Oil New Guinea Ltd v Yakainga Business Group (Inc)

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 01 August 2014
• Citation: (2014) N6851
• Court: National Court
• Year: 2014
• Judgement Number: N6851

Full : WS 577 of 2014; Mobil Oil New Guinea Limited v Yakainga Business Group (Inc) (2014) N6851

National Court: Hartshorn J

Judgment Delivered: 1 August 2014

N6851

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 577 OF 2014

BETWEEN:

MOBIL OIL NEW GUINEA LIMITED

Plaintiff

AND:

YAKAINGA BUSINESS GROUP (INC)

Defendant

Waigani: Hartshorn J

2014: 10th July&1st August

Application for interlocutory injunctive orders

Cases Cited:

Papua New Guinea Cases

Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC853

Craftworks Nuigini Pty Ltd v. Allan Mott (1977) SC525

Golobadana No 35 Ltd v Bank of South Pacific Ltd (2002) N2309

Koang No 47 Ltd v Mondo Merchants (2001) SC675

Markscal Limited v. MRDC [1996] PNGLR 419

Robinson v. National Airlines Commission [1983] PNGLR 478

Overseas Cases

American Cyanamid Company v. Ethicon Limited (1975) 2 WLR 316

Films Rover International Ltd v Canon Films Sales Ltd [1987] 1 WLR 670

Counsel:

Mr. J. Brooks, for the Plaintiff

Mr. J. Apo, for the Defendant

1st August, 2014

1. HARTSHORN J: Mobil Oil New Guinea Limited (Mobil) operates a service station at five mile, Port Moresby, and has done for over 20 years. This is pursuant to a lease agreement with Yakaingi Business Group (Inc) (YBG). The lease contains an option to renew for a further period of ten years. Mobil claims that it exercised this option but YBG claims otherwise and has given Mobil a notice to vacate. Mobil has commenced this proceeding seeking specific performance and damages in lieu or in addition, and interim and permanent injunctive relief preventing YBG from evicting Mobil or from taking any steps that are prejudicial to Mobil’s interests.

2. Mobil now seeks interlocutory injunctive orders which are opposed by YBG. YBG has given an undertaking not to evict Mobil until I deliver this decision.

Preliminary

3. YBG submits that Mobil’s notice of motion should be struck out as it does not contain a correct reference to the National Court Rules which gives the power and jurisdiction to this court to grant the orders sought in the notice of motion. This is because there is no such Rule as Order 4 Rule 39 (Motions Amendment Rules). Further, Order 12 Rule 1 and Order 10A Rule 16 do not specifically provide for the relief that Mobil seeks.

4. YBG also relies upon Order 4 Rule 49(8) National Court Rules, which is as follows:

“All Motions must contain a concise reference to the court’s jurisdiction to grant the orders sought. Motions not containing such reference will not be accepted for filing. If accepted by the Registry staff without such reference, and it goes before the Motions Judge, the Court may strike out the motion for being incompetent and for lack of form.”

5. This Rule curiously provides that all motions must contain a concise reference and those that do not will not be accepted for filing. The Rule then goes on to provide that, if the motion is accepted, the Court may strike out the motion.

6. I am satisfied that this court can make the orders that are sought, if it thinks fit, under Order 12 Rule 1 and Order 10A Rule 16 National Court Rules. If however, that is not sufficient, I exercise my discretion under Order 4 Rule 49(8) National Court Rules and allow the motion to proceed on the basis that I have said - that is, I am of the view that Order 12 Rule 1 and Order 10A Rule 16 give this court its power to make the orders sought, if it thinks fit.

Application for interlocutory injunctive relief

7. The principles upon which the court can grant an interlocutory injunction are well settled. The leading authority is a decision of the House of Lords in American Cyanamid Company v. Ethicon Limited (1975) 2 WLR 316. This case has been followed on many occasions in this jurisdiction and cited with approval by the Supreme Court in Craftworks Nuigini Pty Ltd v. Allan Mott (1977) SC525. The principles contained therein have been reaffirmed by the Supreme Court in Chief Collector of Taxes v. Bougainville Copper Limited (2007) SC853.

8. The first consideration is whether Mobil has a serious question to be tried. What that means is:

“What the plaintiff must prove is that he has a serious, not a speculative case which has a real possibility of ultimate success…” : Robinson v. National Airlines Commission [1983] PNGLR 478 and

“……. a strong case which, on the evidence presented would support a permanent injunction”: Markscal Limited v. MRDC [1996] PNGLR 419.

9. The parties have filed affidavits in support of their respective positions. As to the court’s consideration of that evidence at this stage, I am mindful of the words of Lord Diplock in American Cyanamid (supra) at 323:

“It is no part of the court’s function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations.”

10. YBG submits that Mobil does not have a serious question to be tired as amongst others, Mobil failed to exercise its option to renew the lease as required by serving upon YBG the required notice, not more than six months prior to the expiration of the lease.

11. Mr. Jack Tepu, the Marketing Manager for Mobil, deposes however, that after telephoning Ms Roselyn Inuga, the Chairwoman of YBG, he arranged to meet her at the five mile Mobil service station. That night on 5th September 2013, he personally delivered to Ms Inuga at about 6:00pm, a notice of exercise of option to renew the lease and a non-binding letter of intent attaching a proposed renewed lease. There is also email correspondence in evidence, in which Ms Inuga requests copies of documents. Significantly, Ms Inuga does not deny receiving the documents and states that she forget to get copies.

12. On the documents before me, I am satisfied that a serious question to be tried has been established that Mobil did exercise its option under the lease. This is not speculative, but has a real possibility of success to my mind.

13. Having found that Mobil has established that it has a serious question to be tried, the next question is whether damages are an adequate remedy. If they are, the interlocutory injunction sought should be refused.

14. Lord Diplock explained the rationale for the court considering whether damages would be adequate remedy in American Cyanamid v. Ethicon (supra) when he said at 323:

“…..the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages …. would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage.”

15. Matters to be considered in determining whether damages would be an adequate remedy in circumstances such as this, according to the authorities are:

a) Whether damages are able to be calculated; and

b) That claims concerning real property are generally matters in which damages are not considered to be an adequate remedy particularly where the remedy of specific performance is available: Koang No 47 Ltd v Mondo Merchants (2001) SC675.

16. In this instance specific performance is being claimed. One of the principles pertaining to specific performance is that a contract for the grant of an interest in land will normally be specifically enforced.

17. Another consideration is that although damages maybe an adequate remedy, are they an available remedy – will the party liable to pay the damages be able to do so.

18. In this instance, the evidence is to the effect that Mobil five mile service station is the largest service station in Papua New Guinea and in the whole Pacific Region. Mobil submits that damages would not be an adequate remedy. Mr. Tepu has deposed that the service station in question generates between K4 million and K6 million in profit annually for the plaintiff. Mobil submits that in circumstances where Mobil has a contractual right to a further 10 years lease of the premises, the loss that Mobil stands to suffer is enormous and YBG could not possibly compensate Mobil in damages to the value of the loss that may be sustained if the injunction is not granted. In the submissions of YBG, the question of whether Mobil can be adequately compensated by an order for damages is not specifically addressed with reference made only to earlier submissions. Those earlier submissions also do not address the question of whether damages would be an adequate remedy.

19. As to whether damages would be an adequate remedy, as this matter concerns Mobil’s interest in the land upon which it has its service station and in respect of which it seeks specific performance of the lease and option therein, and given the profit that it generates, and the lack of any...