East Arowe Timbers Resources Limited and Michael Aiyap and Blaisius Viririo and Alois Amon v Cakara Alam (PBG) Limited and Papua New Guinea Forest Authority and Martin Mato (2008) N3270

• Jurisdiction: Papua New Guinea
• Court: National Court
• Judge: Makail AJ
• Judgment Date: 18 February 2008
• Citation: (2008) N3270
• Judgment Number: N3270
• Year: 2008
• Docket Number: WS NO 939 OF 2004

Full Title: WS NO 939 OF 2004; East Arowe Timbers Resources Limited and Michael Aiyap and Blaisius Viririo and Alois Amon v Cakara Alam (PBG) Limited and Papua New Guinea Forest Authority and Martin Mato (2008) N3270

National Court: Makail AJ

Judgment Delivered: 18 February 2008

N3270

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO 939 OF 2004

EAST AROWE TIMBERS RESOURCES LIMITED

First Plaintiff

AND

MICHAEL AIYAP

Second Plaintiff

AND

BLAISIUS VIRIRIO

Third Plaintiff

AND

ALOIS AMON

Fourth Plaintiff

AND

CAKARA ALAM (PNG) LIMITED

First Defendant

AND

PAPUA NEW GUINEA FOREST AUTHORITY

Second Defendant

AND

MARTIN MATO

Third Defendant

Waigani: Makail AJ

2008: 31 January

: 18 February

INTERLOCUTORY RULING

INJUNCTION- ex parte interim injunctive orders - application to set aside - National Court’s jurisdiction - Constitution - Sections 163(2) 155 (3)(a) and (4), and schedule 2.2 - National Court Rules,- Order 12, rule 8,- resjudicta and issue estoppel - whether capable of providing complete defence to claim that ex parte interim injunction should be set aside - considerations to take into account when determining application to set aside interim orders - undertaking as to damages - seriousness of undertaking - who to give undertaking - when to give undertaking - undertaking given to court and not to the other parties - right of party to sue on the undertaking - court’s discretion to enforce undertaking – assessment of damages pursuant to undertaking based on established principles on damages applicable to breach of contract - application of considerations - orders.

EVIDENCE - Affidavit of Counsel relied upon to support application to set aside interim orders – hearsay - improper for counsel to swear Affidavit - cannot be both lawyer and witness - certain parts of the Affidavit struck out.

ELECTION OF SHAREHOLDERS AND DIRECTORS OF COMPANY - Sections 104 and 137 of Companies Act 1997 - breach - effect.

Cases cited:

Emas Estate Development Pty Limited -v- John Mea and The State [1993] PNGLR 215

Gobe Hongu Limited -v- National Executive Council and Others (1999) N1920

Simon Mali -v- The State (2002) SC 690

Mainland Holdings Limited & Others -v- Paul Robert Stobbs & Others (2003) N2522

Mark Ekepa, Pala Teya & Others -v- William Gaupe & Others (2004) N2694.

Pius Niu – Senior Sergeant Mas Tanda -v- The State (2004) N 2765)

Lee & Song Timber (PNG) Co Limited -v- Nathaniel Burua as Chairman, East New Britain Provincial Forest Management Committee & 5 Others (2005) 2836

Counsels:

Mr. L Kari, for the First & Third Plaintiffs.

Mr. F Griffin, for the First Defendant.

Mr. J Bokomi, for the Third Defendant.

18 February, 2008

1. MAKAIL AJ: INTRODUCTION: This is an application by the First and Third Plaintiffs by an Amended Notice of Motion filed on 29 January 2008 pursuant to Order 12, rule 8 of the National Court Rules seeking inter alia Orders that:

1. the ex parte Orders of the National Court of 29 November 2007 by Her Honour Justice Davani be set aside;

2. pursuant to Orders dated 29 December 2006, the First Defendant immediately pay all outstanding premiums and levies for shipments from December 2006 to December 2007 including all illegal deductions totalling K133,660.72 into the said account forthwith; and

3. the Defendants pay costs of the Application on Solicitor/Client basis.

It should be stated at the outset that I was informed by Mr Kari of counsel for the First and Third Plaintiffs that the Second and Fourth Plaintiffs have withdrawn from this court proceeding and the First and Third Plaintiffs will be discontinuing the proceeding against the Second Defendant.

Hence, these parties were not represented at the hearing of the Amended Notice of Motion on 31 January 2008.

EVIDENCE

2. In support of the Application, the First and Third Plaintiffs relied on the following Affidavits:

1. Affidavit of Peter Ling sworn and filed on 08 October 2007;

2. Affidavit of Blaisius Viririo sworn and filed on 13 December 2007;

3. Affidavit in Support of Blaisius Viririo sworn and filed on 21 August 2007;

4. Affidavit in Support of Leslie Kari sworn and filed on 07 May 2007; and

5. Affidavit in Support of Leslie Kari sworn on 24 January 2008 and filed on 25 January 2008.

In opposing the Application, the First and Third Defendants relied on the following Affidavits:

1. Affidavit of Francis Ramangio sworn and filed on 30 January 2008;

2. Affidavit in Support of Martin Mato sworn on 13 September 2007 and filed on 14 September 2007;

3. Affidavit of Carl Okuk sworn on 30 January 2007; and

4. Affidavit of Search of Sete Ewapi sworn on 19 September 2007 and filed on 20 September 2007.

BRIEF BACKGROUND

3. The First Plaintiff is a landowner company incorporated under the Companies Act 1997 and holder of a Timber Permit No 14-55 dated 31 May 1991 (herein the Timber Permit) on behalf of the landowners of the Arowe area of the West New Britain Province.

4. Pursuant to the Timber Permit, it entered into a Logging and Marketing Agreement with the First Defendant on 6 June 1991.

5. The Third Plaintiff claimed that he is a major landowner and shareholder of the First Plaintiff company. He also claimed that he is the Chairman of the Board of Directors of the First Plaintiff company.

6. In an Amended Writ of Summons filed on 9 August 2004, the First and Third Plaintiffs claimed damages and outstanding premiums and levies from the First Defendant as a result of alleged breaches of the Logging and Marketing Agreement by the First Defendant.

7. On 6 April 2005, the Third Defendant filed a Notice of Motion seeking leave to join as a party in this court proceeding and also to challenge the standing of the Third Plaintiff to issue this court proceeding in the name of the First Plaintiff company.

8. On 26 October 2005, the Notice of Motion of the Third Defendant was heard by His Honour Mr Justice Sakora and after hearing the evidence of the parties adjourned for submissions. It appears on 3 November 2005, His Honour dismissed the Notice of Motion of the Third Defendant with costs and allowed this court proceeding to proceed. (See copy of the Court Order of 3 November 2005 marked as Annexure “A” to the Affidavit on Support of Leslie Kari sworn on 24 January 2008 and filed on 29 January 2008).

UNDISPUTED FACTS

9. It is not disputed by the parties that following the ruling of His Honour Mr Justice Sakora on 3 November 2005, on 29 December 2006, the National Court (per His Honour Mr Justice Cannings) made Orders inter alia that the First Defendant pay all premiums and levies due to the First Plaintiff company from the East Arowe TRP area into a Trust Account to be opened and signed jointly by PNG Legal Services, the First Defendant and Allans Lawyers and disbursement to be made by them until the issues are determined.

10. Attempts to open a bank account with all the commercial banks in Port Moresby were unsuccessful and it appears that the premium and levy monies were held in the First Defendant’s Trust Account until 12 June 2007 when by consent of all parties, the National Court (per Her Honour Justice Davani) varied the Court Order of 29 December 2006 for all the premium and levy monies to be paid to the First Plaintiff’s company’s Account No 1001282680 with Bank South Pacific Limited Port Moresby Branch.

11. It appears following the Court Order of 12 June 2007, the premium and levy monies were paid to the First Plaintiff company’s Bank Account No. 1001282680 at Bank South Pacific Limited.

12. On 14 September 2007, the Third Defendant filed a Notice of Motion seeking inter alia an Order for the calling of a Shareholder’s meeting of the First Plaintiff company to inter alia resolve the dispute on the further conduct of this court proceeding. I note this Notice of Motion was listed for hearing on 21 September 2007 but on 21 September 2007, all parties appeared and had it adjourned by consent to 5 October 2007 whilst parties negotiate an out of Court settlement. On 5 October 2007, the Notice of Motion was further adjourned and is pending hearing to date. I will return on this Notice of Motion later on in this Judgment.

13. On 29 November 2007, the First Defendant applied for and was granted ex parte Interim Injunction to inter alia restrain all other parties from dealing with the premium and levy monies that were paid by the First Defendant to the First Plaintiff company’s bank account until the hearing and determination of the Third Defendant’s Notice of Motion filed on 14 September 2007. The Interim Injunction was returnable on 5 December 2007 for hearing.

14. On 5 December 2007, when the ex parte Interim Injunction was returnable for hearing, all parties appeared before His Honour Mr Justice Hartshorn and had the hearing of the ex parte Interim Injunction adjourned and extended the ex parte Interim Injunction to 10 December 2007 for hearing. On 10 December 2007, all of the parties again appeared before Her Honour Justice Davani and again adjourned the hearing of the ex parte Interim Injunction to 18 December 2007. On 20 December 2007, only the Counsel for the First and Third Plaintiffs and Counsel for the First Defendant appeared before His Honour Mr. Justice Hartshorn and adjourned the matter for a special fixture hearing and extended the ex parte Interim Injunction until further Order.

15. As I noted above, the Third Defendant’s Notice of Motion of 14 September 2007 is still pending hearing despite the Order of Her Honour Justice Davani of 29 November...