Robert Kaidai for himself and on behalf of 120 other employees of Lutheran Shipping, Madang v Agua Nombri (Contemnor) (2014) N5718

• Jurisdiction: Papua New Guinea
• Judge: Cannings J
• Judgment Date: 05 September 2014
• Court: National Court
• Docket Number: OS NO 37 OF 2014
• Citation: (2014) N5718
• Year: 2014
• Judgement Number: N5718

Full Title : OS NO 37 OF 2014; Robert Kaidai for himself and on behalf of 120 other employees of Lutheran Shipping, Madang v Agua Nombri (Contemnor) (2014) N5718

National Court: Cannings J

Judgment Delivered: 5 September 2014

N5718

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

OS NO 37 OF 2014

ROBERT KAIDAI FOR HIMSELF AND ON BEHALF OF

120 OTHER EMPLOYEES OF LUTHERAN SHIPPING, MADANG

Plaintiffs

V

AGUA NOMBRI

Contemnor

Madang: Cannings J

2014: 3, 4 June, 2, 8, 11, 29 July, 2, 5 September

CONTEMPT – disobedience contempt – alleged failure of chief executive officer of company to comply with court orders that company employees be paid salaries and wages on time, that he must cooperate with employees in ensuring orderly resumption of operations, that he shall reinstate a particular employee – whether there was a failure to comply with orders – whether failure to comply was deliberate.

The National Court made various interim orders in a human rights case commenced by the employees of a company, including that the CEO of the company (the contemnor) pay the employees their salaries and wages on time, that he cooperate with the employees in ensuring the orderly resumption of operations after a strike and that he reinstate a particular employee by a particular date and time. A number of the employees who had commenced the human rights case commenced fresh proceedings, by originating summons, charging the contemnor with contempt of court for disobedience of orders made in the human rights case. The contemnor pleaded not guilty so a trial was conducted.

Held:

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

· the order was clear;

· it was properly served; and

· there was a deliberate failure to comply.

(2) The orders were clear and unambiguous and were served on the contemnor, and he did not take issue with those elements of the offence of contempt.

(3) The third element (deliberate failure to comply) was contentious and in the case of each order it was necessary for the plaintiffs to prove that the contemnor failed to comply with the order and that the failure to comply was deliberate.

(4) As to the order requiring the employees to be paid on time, there was a failure to comply as the order required them to be paid “without failure, and that if for some reason this cannot happen an affidavit explaining the reasons shall be filed in the National Court immediately”, and there were numerous instances in the seven-month period after the order was served on the contemnor, of the employees being paid late without an explanatory affidavit being filed. The contemnor failed to comply and it was a deliberate failure on his part as it was within his power to comply with the order but he failed to take adequate steps to ensure that the order was complied with.

(5) As to the order requiring that he cooperate with the employees, failure to comply with this order was not proven.

(6) As to the order requiring that he reinstate the lead plaintiff, failure to comply with this order was not proven.

(7) The contemnor was accordingly found guilty of contempt of court in respect of the charge alleging disobedience of the first order and not guilty in respect of the charge alleging disobedience of the other two orders.

Cases cited

The following cases are cited in the judgment:

Elias Padura v Stephanie Valakvi (2012) N4830

Ian Augerea v Todagia Kelola & South Pacific Post Ltd (2014) N5582

Martin Kenehe v Michael Pearson (2009) N3763

Mathew Michael v John Glengme & Isaac Gladwin (2008) N3429

ORIGINATING SUMMONS

This is the verdict for a person charged with contempt of court.

Counsel

Y Wadau, for the plaintiffs

A Daugl & O Amemai, for the defendant (contemnor)

5th September, 2014

1. CANNINGS J: This is the verdict on charges of contempt of court laid against Agua Nombri, the Chief Executive Officer of Lutheran Shipping (the trading name of the company, Kambang Holdings Ltd). Mr Nombri is referred to in this judgment as ‘the contemnor’, being a person who, in accordance with Order 14, Rule 37 of the National Court Rules, is a person alleged to be guilty of contempt of court. The charges were laid in the following circumstances.

2. In October 2013 the operations of Lutheran Shipping in Madang came to a halt. The employees of the company had a number of grievances with the management, in particular, the contemnor, and staged a stop-work protest. On 11 October 2013 a number of employees commenced National Court proceedings against him by filing an application for enforcement of human rights: HRA No 105 of 2013, Michael Belem for himself and on behalf of 150 other employees of Lutheran Shipping v Agua Nombri. They claimed amongst other things that the contemnor had breached their human rights by ordering that they not be paid their salaries and wages.

3. On 18 October 2013 the Court, having heard motions by both the employees and the contemnor in which both sides sought various orders, made interim orders that required both sides to do, and refrain from doing, certain things with a view to restoring the operations of Lutheran Shipping. The Court ordered, amongst other things, that:

8(a) The defendant [the contemnor] shall ensure that the plaintiffs are paid their wages and salaries on time, without fail, and that if for some reason this cannot happen an affidavit explaining the reasons shall be filed in the National Court immediately ….

(d) All plaintiffs and the defendant [the contemnor] shall cooperate with each other and the Court in ensuring an orderly resumption of operations of Lutheran Shipping and the expeditious resolution of the disputes and grievances underlying these proceedings.

4. On 21 November 2013 the Court, having heard motions by both the employees and the contemnor in which both sides sought various orders, made further orders including the following:

1 ... the defendant [the contemnor] shall reinstate with effect from 12 noon on 25 November 2013, the following employees:

Andrew Mingai

Emmanuel Akau

Phillip Pomahun

Robert Kaidai.

5. On 5 February 2014 Robert Kaidai, one of the employees whose reinstatement was ordered on 21 November 2013, acting for himself and 120 other Lutheran Shipping employees (the plaintiffs), commenced fresh proceedings against the contemnor, by originating summons, charging him with contempt of court. The plaintiffs allege that the contemnor disobeyed each of the three orders set out above. In effect the contemnor is facing three charges. It is alleged that:

1 he breached order 8(a) of 18 October 2013 by not ensuring that the employees were paid their wages and salaries on time and not immediately filing an explanatory affidavit when it became apparent that wages and salaries could not be paid on time;

2 he breached order 8(d) of 18 October 2013 by not cooperating with the plaintiffs to ensure an orderly resumption of operations of Lutheran Shipping;

3 he breached order 1 of 21 November 2013 by not reinstating Robert Kaidai by 12 noon on 25 November 2013.

The contemnor pleaded not guilty so a trial has been held.

PRELIMINARY ARGUMENT

6. Mr Daugl, for the contemnor, raised what he termed a ‘preliminary issue’ at the beginning of submissions, which, he argued, if upheld by the Court, would result in the charges of contempt of court being summarily dismissed. The argument is based on the fact that Kambang Holdings Ltd went into voluntary liquidation on 26 May 2014 as a result of the appointment by the board of the company of Mr David Guinn as liquidator. Mr Daugl submitted that the continuance of the contempt proceedings against the contemnor was subject to the agreement of the liquidator or an order of the Court under Section 298(1)(c) (effect of commencement of liquidation) of the Companies Act. Mr Guinn had not given his agreement and the Court had not ordered otherwise, so the proceedings should be dismissed.

7. This argument is not supported by the wording of Section 298(1)(c), which states:

With effect from the commencement of the liquidation of a company … unless the liquidator agrees or the Court orders otherwise, a person shall not—

(i) commence or continue legal proceedings against the company or in relation to its property; or

(ii) exercise or enforce, or continue to exercise or enforce, a right or remedy over or against property of the company.

8. These proceedings are not against the company or in relation to its property. The plaintiffs are not purporting to exercise or enforce a right or remedy over or against the property of the company. The proceedings are against the contemnor in person. The fact that he is alleged to have failed to comply with court orders that required him to do things in his capacity as CEO of the company, Kambang Holdings Ltd, is of no consequence. The originating summons seeks principally...