Newsat Limited v Telikom PNG Limited and Independent Consumer and Competition Commission and The Independent State of Papua New Guinea (2007) N3447

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 07 May 2007
• Court: National Court
• Docket Number: WS NO 1350 OF 2006
• Citation: (2007) N3447
• Year: 2007
• Judgement Number: N3447

Full Title: WS NO 1350 OF 2006; Newsat Limited v Telikom PNG Limited and Independent Consumer and Competition Commission and The Independent State of Papua New Guinea (2007) N3447

National Court: Cannings J

Judgment Delivered: 7 May 2007

N3447

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 1350 OF 2006

NEWSAT LIMITED

Plaintiff

AND

TELIKOM PNG LIMITED

First Defendant

INDEPENDENT CONSUMER AND COMPETITION COMMISSION

Second Defendant

THE INDEPENDENT STATE OF

PAPUA NEW GUINEA

Third Defendant

Waigani: Cannings J

2007: 24-26 April, 7 May

RULING

CONTEMPT – failure to comply with court orders – whether person ordered to do things must be given notice of consequences of failure to comply – whether evidence of non-compliance – standard of proof.

The National Court made orders requiring Telikom to do certain things in relation to a contract with Newsat. Newsat asserts that Telikom did not do the things required by the court order and the failure to comply was deliberate. Newsat brought a motion against Telikom for punishment for contempt. Telikom claimed that the orders failed to give notice of the consequences of non-compliance and that there was no evidence of a failure to comply.

Held:

(1) Proceedings for contempt are criminal in nature and the court must be satisfied beyond reasonable doubt that the three elements of the offence have been proven to exist beyond reasonable doubt: ie

· the order was clear;

· it was properly served; and

· there was a deliberate failure to comply.

(2) The order was clear and unambiguous.

(3) It was properly served. In the circumstances the fact that the order did not warn Telikom of the consequences of non-compliance did not matter.

(4) Telikom failed, deliberately, to comply with the order.

(5) Telikom was therefore guilty of contempt of court and is liable to punishment.

Cases cited

The following cases are cited in the judgment:

Newsat Ltd v Telikom PNG Ltd, ICCC and The State, WS 1350 of 2006, 26.09.06, unreported

Ome Ome Forests Ltd v Ray Cheong (2002) N2289

Peter Luga v Richard Sikani and The State (2002) N2286

Richard Sikani v The State and Peter Luga (2003) SC807

Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR 533

The State v Foxy Kia Tala, Re Detective Constable Corney Winjan [1995] PNGLR 303

NOTICE OF MOTION

This was a motion for punishment of a company for contempt of court, for not complying with an order of the National Court.

Counsel

D Cooper SC, G Poole and T Imal, for the plaintiff

C Scerri QC, I Molloy and A Mana, for the 1st defendant

7 May, 2007

1. CANNINGS J: This is a ruling on whether Telikom PNG Ltd is guilty of contempt for disobeying an order of the National Court.

2. Salika J made the order on 26 September 2006 on the motion of Newsat Ltd, a company that had a year earlier entered into a contract with Telikom. Newsat sued Telikom and two other parties, claiming damages and other remedies arising from alleged breach of contract by Telikom. Salika J ordered Telikom to do certain things in relation to the contract.

3. Newsat argues that Telikom did not do what it was ordered to do and is in contempt of court. Newsat says it has proven the three elements of contempt:

· the order was clear;

· they served the order on Telikom; and

· Telikom deliberately failed to comply with it.

4. Telikom disagrees. They say that, though the order was clear –

· it was not properly served, as the order failed to specify the consequences of failing to comply with it; and

· they did not fail to comply with it but if they did, it was not a deliberate failure.

5. Contempt of court is a criminal matter and the plaintiff must prove the existence of the three elements beyond reasonable doubt. If one element is not proven, Telikom will be not guilty. If all elements are proven, Telikom will be guilty and I will hear the parties on the question of punishment. (Ome Ome Forests Ltd v Ray Cheong (2002) N2289; Peter Luga v Richard Sikani and The State (2002) N2286; Richard Sikani v The State and Peter Luga (2003) SC807; Ross Bishop and Others v Bishop Bros Engineering Pty Ltd and Others [1988-89] PNGLR 533; The State v Foxy Kia Tala, Re Detective Constable Corney Winjan [1995] PNGLR 303.)

6. But before dealing with the two contentious issues, I need to explain what the contract between the parties was about, how the dispute between them came to court and what Salika J’s order required. I also need to state the charge that Telikom is facing.

THE CONTRACT AND THE DISPUTE

7. The contract is about the provision of satellite-based broadband, called VSAT services. The contract commenced on 26 September 2005 and its duration was one year. Any extension beyond that was subject to agreement of both parties.

Telikom licence

8. Telikom has exclusive authority under a licence granted to it by the government telecommunications regulatory authority, PANGTEL, to provide satellite-based telecommunications services within and from PNG. Its licence allows it to farm out provision of those services to other companies; and that is what it did under the contract with Newsat, called a channel dealer agreement. Newsat has access to a satellite, via the Newsat gateway, which can carry signals into and out of PNG. It owns software that allows a customer access to the satellite.

Service requests

9. Under the contract a person wanting to sign up as a Newsat/Telikom broadband customer would fill out a “service request”, a five-page form (plus terms and conditions) that was a schedule to the contract. Telikom was required to forward it to Newsat, which would then decide whether it could provide its gateway. If it could, it would sign the form and return it to Telikom. The last page of the form provided for acceptance by the customer and Telikom and Newsat, thus setting up a tri-partite agreement. The customer paid Newsat an agreed sum to get access to the satellite. Newsat paid Telikom 25% of its total billings on a monthly basis.

10. Besides paying Newsat and obtaining Telikom approval a customer had to have the necessary hardware (satellite dishes and other equipment) to get on line. Most customers engaged a local company, Hitron Ltd, for that purpose. Hitron would import the equipment, then dispatch its technicians to the customer’s site and set things up. Hitron was not a party to the Newsat/Telikom contract.

Events in August 2006

11. By August 2006 – the month before the Newsat/Telikom contract was due to come to an end – about 30 customers had signed up to use the Newsat gateway, with Telikom approval. On 16 August Telikom gave Newsat notice that it would terminate the contract on 26 September 2006. Telikom also at that time decided that no further customer requests should be accepted.

12. According to Telikom’s company secretary, Ere Kariko, that decision was made as the contract with Newsat was only a short-term arrangement. Telikom was setting up its own network, focussed on delivering broadband data services to remote areas. As the expiry date of the Newsat/Telikom contract was approaching, Telikom was confident that its own network would soon be operational. Customers signed up to the Newsat gateway could be migrated to the Telikom network. Telikom took the view that given the lead-time in Newsat and Hitron connecting a new customer after approval of a service request it would be more convenient and cost effective for the customer to be directly connected to the Telikom network.

13. Telikom was concerned about a number of things. Newsat and Hitron were marketing services provided by Telikom under the Newsat arrangements as voice replacement services. Newsat was permitting voice traffic using the satellite facilities, in breach of the contract, which strictly confined the services to data traffic. Newsat and Hitron were installing VSAT facilities outside the Newsat/Telikom contract, in breach of the law.

Writ filed: 19 September 2006

14. On 19 September 2006 Newsat sued Telikom by filing and serving WS No 1350 of 2006. Newsat claimed that Telikom breached the contract in a number of ways. They didn’t approve any service requests until June 2006, nine months after the start of the contract. They approved only 30 out of 120 service requests. They did not accept any service requests after 16 August 2006. They stated a desire to compete with Newsat.

15. Newsat sought damages for breach of contract and other remedies. They wanted an injunction restraining Telikom from impeding with Newsat’s provision of VSAT services to existing or prospective customers. They wanted to stop Telikom representing that Newsat’s services are no longer available in PNG. They sought an injunction requiring Telikom to approve VSAT services to everybody who applies before 26 September 2006. Newsat also wanted the court to declare that a number of laws are unconstitutional and void, eg the Telecommunications Industry Act 2002 and the Independent Consumer and Competition Commission Act 2002.

WHAT DID SALIKA J ORDER?

Hearing on 22 September 2006

16. On 22 September 2006 – four days before the contract was due to expire – the case came before Salika J. Newsat had filed a notice of motion seeking various interim orders. Both parties were present and argued their positions; Newsat applying for the orders, Telikom resisting them.

Ruling of 26 September 2006

17. In a written...