IPBC of PNG v MVIL

• Jurisdiction: Papua New Guinea
• Judge: Hartshorn J
• Judgment Date: 17 June 2015
• Citation: (2015) N6584
• Court: National Court
• Year: 2015
• Judgement Number: N6584

Full : WS 1252 of 2010; Independent Public Business Corporation of Papua New Guinea v Motor Vehicles Insurance Limited and Nominees Niugini Limited and National Superannuation Fund Limited and Benjamin Terence O’Dwyer. Terence James O’Dwyer and Backwell Lombard Capital Pty Ltd and Dr John Mua and Bernard Fong (2015) N6584

National Court: Hartshorn J

Judgment Delivered: 17 June 2015

N6584

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS 1252 OF 2010

BETWEEN:

INDEPENDENT PUBLIC BUSINESS CORPORATION

OF PAPUA NEW GUINEA

Plaintiff

AND:

MOTOR VEHICLES INSURANCE LIMITED

First Defendant/Second Cross Claimant

AND:

NOMINEES NIUGINI LIMITED

Second Defendant/First Cross Defendant to Second Cross Claim

AND:

NATIONAL SUPERANNUATION FUND LIMITED

Third Defendant

AND:

BENJAMIN TERENCE O’DWYER. TERENCE JAMES O’DWYER and BACKWELL LOMBARD CAPITAL PTY LTD

Second Cross Defendants to Second Cross Claim

AND:

DR JOHN MUA

Third Cross Defendant to Second Cross Claim

AND:

BERNARD FONG

Fourth Cross Defendant to Second Cross Claim

Waigani: Hartshorn J

2015: 13th And 17th June

APPLICATION pursuant to Order 12 Rule 1 and Order 14 Rules 10 (1) and (4) National Court Rules – injunction to restrain payment of dividends

Cases cited:

Airlines of Papua New Guinea Ltd v. Air Niugini Ltd (2010) N4047

American Cyanamid Company v. Ethicon Ltd (1975) 1 All ER 594

Canopus No. 16 Ltd v. Maisi Trust Co Ltd (2008) N3401

Collector of Taxes v. Bougainville Copper Ltd (2007) SC853

Craftworks Niugini Pty Ltd v. Allan Mott (1997) SC525

Eastern Highlands Provincial Government v. Aita Ivarato [1998] PNGLR 268

Fiona Trust & Holding Corporation v. Yuri Privalov [2008] EWHC 1478

Golobodana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309 Chief

Keyapaka Investments Pty Ltd v. Dat (1998) N1772

Louis Medaing v. Ramu Nico Management (MCC) Ltd (2010) N4127

Ramu Nico Management (MCC) Ltd v. Eddie Tarsie (2010) SC1075

Sioti Bauf and Lavoi Nodai v. Poliamba Pty Ltd [1990] PNGLR 278

Tarsie v. Ramu Nico (MCC) Ltd (2010) N3960

Counsel:

Mr. K. Imako, for the Plaintiff

Mr. E. G. Andersen, for the First Defendant/Second Cross Claimant

Mr. P. A. Lowing and Mr. G. Geroro, for the Second Defendant/First Cross Defendant to Second Cross Claim

Mr. J. Brooks, for the Third Defendant

17th June, 2015

1. HARTSHORN J: This is a decision on an application for an injunction to restrain the payment of dividends.

2. Motor Vehicles Insurance Ltd (MVIL) the first defendant second cross claimant applies for amongst others injunctive relief to restrain Nominees Niugini Ltd (NNL) the second defendant and first cross defendant to the second cross-claim, from receiving the 2014 final dividend on any Bank South Pacific Ltd (BSP) shares in its name. A similar injunction is sought to restrain BSP from paying such dividend to NNL. Further, orders are sought for BSP to pay the dividend and all future payments payable on BSP shares held by NNL, into the National Court Registry Trust Account pending the determination of this proceeding substantively.

3. MVIL relies upon Order 12 Rule 1 and Order 14 Rules 10 (1) and (3) National Court Rules.

4. The application is supported by the Independent Public Business Corporation Ltd (IPBC) the plaintiff, and is opposed by NNL. National Superannuation Fund Ltd the third defendant, takes no position.

Background

5. This proceeding concerns an Equity Monetisation Contract (EMC) between MVIL and NNL. IPBC seeks amongst others to set aside the EMC as it is claimed that it was entered into in breach of certain statutory requirements.

The application

6. MVIL seeks to prevent the payment to NNL of the 2014 dividend and any future money that becomes payable on BSP shares in the name of NNL and to have the money preserved by having it paid into court pending the ultimate outcome of the proceeding. This is necessary, it is submitted, as damages would not be an adequate remedy and the balance of convenience favours the money being preserved.

7. NNL submits amongst others that the relief sought is not necessary as damages would be an adequate remedy. Further, MVIL should not be entitled to the relief that it seeks as it has not come to court with clean hands.

Law

8.

a) As for Order 12 Rule 1 National Court Rules, this provision in essence allows the court at any stage of proceedings on the application of any party, to make such orders as the nature of the case requires notwithstanding that the applicant does not make a claim for those orders in the originating process. As I said in Canopus No. 16 Ltd v. Maisi Trust Co Ltd (2008) N3401, this Rule provides for what was permitted in Collison v. Warren [1901] 1 Ch 812. In that case a defendant successfully obtained a mandatory injunction against the plaintiff even though he had not filed a counterclaim, as what he was seeking arose out of the same contract upon which relief was being sought in the proceedings.

b) Order 14 Rule 10 is as follows:

“10 Preservation of property

(1) In proceedings concerning any property, or in proceedings in which any question may arise as to any property, the Court may make orders for the detention, custody or preservation of the property.

(2) An order under Sub-rule (1) may authorize any person to enter any land or to do any other thing for the purpose of giving effect to the order.

(3) In proceedings concerning the right of any party to a fund, the Court may order that the fund be paid into Court or otherwise secured.”

9. MVIL relies upon Keyapaka Investments Pty Ltd v. Dat (1998) N1772 a decision of Injia J (as he then was). His Honour held that the court has unlimited jurisdiction to issue injunctions, interim or permanent, for the preservation of property, real or personal, whether the property be situated on customary land or registered land.

10. MVIL submits as follows as to the various parts of Rules 10 (1) and (3). As to ‘Property’, in the present case the orders sought are for preservation of the Dividend, the right to a dividend being a chose in action and a form of property for the purposes of Order 14 Rule 10 (1) and a ‘fund’ for the purposes of Rule 10 (3).

11. As to ‘Proceedings concerning’ or ‘in which a question may arise as to’ that property, MVIL submits that the dividends on the Shares have always been the subject matter of the action. Paragraph 6 of the original prayer for relief in the original statement of claim by IPBC is as follows:

“6. An order that NNL account for and pay to MVIL, in a sum to be determined by the Court, all dividends paid on the 530,105,000 BSP shares from the aforesaid transfer date to judgment and or payment.”

12. Further, in MVIL’s second cross claim filed 27th April 2015, MVIL claims against NNL:

“b. The return in full to MVIL of all BSP shares that were delivered to NNL pursuant to the terms of the EMC (and which have not previously been returned to MVIL) including all gross dividends and accretions thereon from the date of delivery of those shares to NNL to the date of judgment hereon, and in exchange therefor the return to NNL from MVIL of the sum drawn down by MVIL under the EMC plus interest at the rate specified in the Judicial Proceedings (Interest on Debts and Damages) Act from the date of the said drawdown to the date of judgment hereon;”

13. As to ‘detention custody or preservation’ of the property, the orders sought do not seek payment of the disputed property to MVIL but its payment into court, which is the classic form of preservation of sums of money.

14. Given the above and in the absence of any submission to the contrary by NNL, I am satisfied that the orders sought are within the terms of Order 14 Rules 10 (1) and (3).

Discretionary tests

15. MVIL submits that the case law is that the usual tests for interim injunctions should be met for a successful application pursuant to Order 14 Rule 10. Reliance is placed upon the decisions of Tarsie v. Ramu Nico (MCC) Ltd (2010) N3960, Louis Medaing v. Ramu Nico Management (MCC) Ltd (2010) N4127 and Ramu Nico Management (MCC) Ltd v. Eddie Tarsie (2010) SC1075. NNL does not submit otherwise as to the case law and also submits that the usual principles on the grant of interim relief apply.

Clean hands - disclosure of material facts

16. However before a consideration of the usual principles, NNL makes submissions on three other matters that I will deal with first. NNL submits that this court’s power to grant an injunction is discretionary, an injunction is an equitable remedy and that an applicant for an injunction must disclose all material facts. In not doing so, it is submitted, MVIL does not come to court with clean hands. A failure to disclose material facts is fatal to an injunction application and here it is submitted, MVIL has not disclosed material facts.

17. Reliance is placed upon the cases of Golobodana No 35 Ltd v. Bank of South Pacific Ltd (2002) N2309 and Eastern Highlands Provincial Government v. Aita Ivarato [1998] PNGLR 268 in which the decision of Sheehan J in Sioti Bauf and Lavoi Nodai v. Poliamba Pty Ltd [1990] PNGLR 278 was referred to with approval. I refer also to my decision in Airlines of Papua New Guinea Ltd...