WS NO 1599 of 2006 Telikom PNG Limited v Independent Consumer and Competition Commission and Digicel (PNG) Limited (2007) N3143

• Jurisdiction: Papua New Guinea
• Judge: Kandakasi, J
• Judgment Date: 22 June 2007
• Court: National Court
• Citation: (2007) N3143
• Year: 2007
• Judgement Number: N3143

Full Title: WS NO 1599 of 2006 Telikom PNG Limited v Independent Consumer and Competition Commission and Digicel (PNG) Limited (2007) N3143

National Court: Kandakasi, J

Judgment Delivered: 22 June 2007

N3143

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 1599 of 2006

BETWEEN

TELIKOM PNG LIMITED

Plaintiff

AND

INDEPENDENT CONSUMER AND COMPETITION COMMISSION

First Defendant

AND

DIGICEL (PNG) LIMITED

Second Defendant

Waigani : Kandakasi, J.

2007: 17 and 18 May

22 June

INTERLOCUTORY INJUNCTION – Principles governing grant or rejection of – No evidence of irreparable damage – Balance of convenience not favouring grant of interim injunction – Undertaking as to damages by or for and on behalf of a company – Not signed under seal of the company – No proper undertaking as to damages – Time of application for injunction a relevant consideration – Failure to act promptly may amount to estoppel by conduct – Application dismissed.

Cases Cited

Chief Collector of Taxes v. Bougainville Copper Limited (02/02/07) SC 853.

Tian Chen Limited v. The Tower Limited (08/11/02) N2313.

Waghi Security Service Pty Ltd v. John Tembon and Western Highlands Provincial Government In Suspension [1994] PNGLR 138.

AGC (Pacific) Ltd v. Woo International Pty Ltd [1992] PNGLR 100.

Counsels:

Mr. I.Molloy, Mr. I. R. Shepherd and Mr. L. Gavara-Nanu Jnr, for Plaintiff/Applicant.

Mr. J.A., M.M. Varitimos and Mr. F. Griffin, for the Second Defendant/ Respondent.

Mr. E. Anderson and Mr. Hollingu, for the First Defendant/Respondent.

22 June 2007

1. KANDAKASI J: On 18th May I handed down my decision in this orally and promised to provide a corrected and detailed version of my reasons for the decision. This is now the promised decision.

2. In pursuance of a Government decision, the Independent Consumer and Competition Commission (ICCC) under its enabling legislation, the ICCC issued a regulatory contract with Telikom, which initially allowed for Telikom’s monopoly in the mobile telephone industry to run to 17 October 2007. The ICCC varied the regulatory contract effectively bringing the deadline for Telikom’s monopoly to 1 April 2007. Telikom claims in these proceedings that the variation was in breach of the regulatory contract and seeks declaratory orders which would effectively nullify Digicel’s license. Pending a trial and conclusion of the substantive matter, Telikom applied for an interim injunction against the ICCC to prevent the ICCC from issuing further licenses and allowing Digicel and another mobile telecommunication company from commencing their operations until 17 October 2007. Digicel and the ICCC oppose Telikom’s application. They argued that there was no serious question to be tried in the substantive proceedings, the balance of convenience does not favour a grant of the injunction Telikom will not suffer any irreparable damage which an order for damages will not adequately compensate and that Telikom failed to give a proper undertaking as to damages.

Relevant Issues

2. The main issue presented for the Court to determine was whether Telikom’s application met all of the requirements for a grant of an interim injunction? A determination of that issue was dependant on a determination of the following questions:

(a) Did these case present serious questions for determination?

(a) Did the balance of convenience favour a grant of an interim injunction against the ICCC and Digicel?

(a) Did Telikom stand to suffer irreparable damage if the Court denied Telikom the injunction it was applying for? and

(a) Did Telikom properly provide an undertaking as to damages?

3. These issues touched on the very principles governing the grant or no grant of interim injunctive orders or relief. The Supreme Court in Chief Collector of Taxes v. Bougainville Copper Limited

1 (02/02/07) SC 853.

1 restated the relevant principles in the following terms:

“In our jurisdiction the principles relevant to injunctive reliefs are well settled. In Golobadana No 35 Ltd v. Bank of South Pacific Limited (formerly Papua New Guinea Banking Corporation),

2 (11/11/02) N2309.

2 Kandakasi J., reviewed all of the case authorities on point from Mt. Hagen Airport v. Gibbs

3 [1976] PNGLR 216.

3 and Public Employees Association v. Public Service Commission

4 [1988-89] PNGLR 585.

4 to subsequent ones like those in Markcal Limited & Robert Needham v. Mineral Resources Development Co. Pty Ltd

5 (05/09/96) N1472.

5 and AGK Pacific (NG) Ltd v. William Brad Anderson Karson Construction (PNG) Ltd & Downer Construction (PNG) Ltd.

6 (4/12/99 or 00) N2062.

6 His Honour then concluded as follows:

7 At page 12 of the Golobadana Case.

7

“A reading of these authorities shows consistency or agreement in all of the authorities that the grant of an injunctive relief is an equitable remedy and it is a discretionary matter. The authorities also agree that before there can be a grant of such a relief, the Court must be satisfied that there is a serious question to be determined on the substantive proceedings. This is to ensure that such a relief is granted only in cases where the Court is satisfied that there is a serious question of law or fact raised in the substantive claim. The authorities also agree that the balance of convenience must favour a grant or continuity of such a relief to maintain the status quo. Further, the authorities agree that, if damages could adequately compensate the applicant, then an injunctive order should not be granted.”

In addition to the above, there is ample authority in our jurisdiction that, before the Court could grant an interim injunctive relief, the applicant must provide an undertaking as to damages.”

4. Bearing these principles in mind, I dealt with the issues in the order presented, starting with the issue of whether the proceedings present a serious question for trial?

Serious Question

5. I considered the question of whether the proceedings present a serious question for trial could be answered by reference to the pleadings and the relevant evidence before me then. The parties agreed that as early as 2002, the government informed Telikom that Telikom’s monopoly in the mobile telecommunications sector would come to an end in five years time. A regulatory contract the ICCC issued on 16 July 2002 confirmed that position under the ICCC’s enabling legislation, the Independent Consumer and Competition Commission Act. Under clause 10.1 of the contract, the ICCC agreed not to issue any license under the Telecommunication Act or any other applicable legislation that would permit anyone other than Telikom to operate as a general carrier within a designated operations area or to operate as a mobile carrier before 17 October 2007. In clause 11.1 (b) of the contract, the contract provided for variation of the contract from time to time by written agreement that are consistent with the regulatory principles or the requirements of the ICCC Act and subject to other additional conditions including notice requirements.

6. In late 2005, the National Executive Council (NEC) through the Chief Secretary invited the Independent Public Business Corporation (IPBC), Telikom and the ICCC as well as PANGTEL to comment on a proposed NEC policy on the introduction of competition in mobile telephone network in PNG. These entities communicated their positions after which the NEC decided on 15 November 2005 to allow for the issuance of two new mobile telecommunications licenses. The decision also directed a variation of the regulatory contract of 2002 to bring forward the end of Telikom’s monopoly period to the end of March 2007. In addition to the gazettal of the NEC decision, the Prime Minister notified Telikom, PANGTEL and IPBC in early December 2005 of the NEC’s decision.

7. In pursuance of the NEC decision, the ICCC informed Telikom by letter dated 11 January 2006, the precise terms of the proposed variation, which included a provision to end Telikom’s mobile monopoly by 31 March 2007. By letter dated 20 February 2006, Telikom accepted the terms of the proposed variation but added three conditions. The first condition required advance notice to Telikom of the terms and conditions and regulations to apply to competitors. The second condition required fair competition with specific emphasis on provision of mobile services in remote areas. The final condition required Telikom’s competitors to meet similar technical and safety standards as Telikom. By letter dated 24 February 2006, the ICCC accepted the conditions put forward by Telikom.

8. The 7th of March 2006 saw the production of a document entitled “New Public Mobile Telecommunications Licenses – Invitation to Tender”. Then on 15 March 2006, the ICCC amongst others released a draft regulatory contract dated 14 March 2006. On the same day, the ICCC wrote to Telikom, IPBC and PANGTEL and provided the Prime Minister with a brief on the draft regulatory contract. The ICCC followed this through with a letter to Telikom on 6 April 2006 requiring action on a number of technical fronts in the light of ICCC’s intention to issue two new mobile licenses at the end of March 2007. Telikom, PANGTEL and IPBC entered into numerous...