Karl Kerepa Yalo v Ian White

• Jurisdiction: Papua New Guinea
• Judge: Kariko, J
• Judgment Date: 15 December 2016
• Citation: (2016) N7655
• Court: National Court
• Year: 2016
• Judgement Number: N7655

Full : WS NO. 765 OF 2016; Karl Kerepa Yalo (Plaintiff) v Ian White (First Defendant) and Andrew Hoare (Second Defendant) and Australian Helicopter Traders Pty Ltd (Third Defendant) and The Helicopter Service Australia Pty Ltd (Fourth Defendant) and Australasian Jet Pty Ltd (Fifth Defendant) (2016) N7655

National Court: Kariko, J

Judgment Delivered: 15 December 2016

N7655

PAPUA NEW GUINEA

[IN THE NATIONAL COURT OF JUSTICE]

WS NO. 765 OF 2016

KARL KEREPA YALO

Plaintiff

V

IAN WHITE

First Defendant

ANDREW HOARE

Second Defendant

AUSTRALIAN HELICOPTER TRADERS PTY LTD

Third Defendant

THE HELICOPTER SERVICE AUSTRALIA PTY LTD

Fourth Defendant

AUSTRALASIAN JET PTY LTD

Fifth Defendant

Waigani: Kariko, J

2016: 6th, 14th & 15th December

CIVIL PRACTICE & PROCEDURE – application for interim injunctions – relevant considerations – claim untenable – damages an adequate remedy

CIVIL PRACTICE & PROCEDURE – application for interim injunctions – equitable relief - relevant considerations – applicant must have “clean hands” – non-disclosure

CIVIL PRACTICE & PROCEDURE – power of court to dismiss proceedings – inherent jurisdiction – wrong party named – exercise of discretion

CIVIL PRACTICE & PROCEDURE – enforcement of undertaking – relevant principles

Cases cited:

Airlines of PNG v Air Niugini Ltd (2010) N4047

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

Employers Federation of Papua New Guinea v Papua New Guinea Waterside

Karl Paul v Aruai Kispe, The Regional Manager, PNG Forest Authority – Lae (2001) N2085 Kerry Lerro v Phillip Stagg & Ors (2006) N3050

Louis Medaing v Ramu Nico Management (MCC) Ltd (2011) SC1157)

Mainland Holdings Ltd v Paul Stobbs (2003) N2522

Mark Ekepa v William Gaupe (2004) N2694

Mt Hagen Urban Local Level Government v Sek No. 15 Ltd (2009) SC1007

Phillip Takori & Ors v Yagari & Ors (2008) SC905

PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126

Reverend Andrew Moime v National Housing Corporation (2012) SC1191

Robinson v National Airlines Commission [1983] PNGLR 478

The National Council of Young Mens Christian Association of PNG (Inc.) v Firms Services Ltd (2010) N4569

Workers and Seaman’s Union and Arbitration Tribunal (1982) N393

White Corner Investments Ltd v Regina Waim Harro (2006) N3089

Legislation:

Constitution of PNG

National Court Rules

Counsel:

Mr S Ketan, for the plaintiff

Mr E Andersen & Ms G Kagora, for the First, Second, Third & Fourth Defendants

Mr T Griffiths, for the Fifth Defendant

DECISION

15th December, 2016

1. KARIKO, J: Two applications have been moved:

(1) The inter partes hearing of the plaintiff’s notice of motion seeking interim injunctive orders which orders I granted following an ex parte urgent application on 11th November 2016; and

(2) an application by the fifth defendant to have the interim orders set aside.

2. I have treated the latter application as the fifth defendant’s response in opposition to the continuation of the interim injunctive orders.

3. Those orders essentially restrain the defendants from exporting two helicopters owned by the third defendant Australia Helicopter Traders Pty Ltd (Australia Helicopter Traders). The helicopters are described as:

(1) Kawasaki BK117 B2, Serial No. 1987, Reg/Mark P2-PRA

(2) Eurocopter AS 350 B3, Serial No. 3271, Reg/Mark P2-THS

Brief background

4. The plaintiff Karl Yalo is the majority shareholder in the company The Helicopter Service Niugini Ltd (Helicopter Service Niugini). The other shareholder is Ian White, the first defendant, who is also the Chief Executive Officer of The Helicopter Service Australia Pty Ltd (Helicopter Service Australia) and Australia Helicopter Traders Pty Ltd (Australia Helicopter Traders) who entered into a charter agreement with Helicopter Service Niugini for the provision of helicopter charter services in Papua New Guinea. The agreement involved four helicopters including the subject helicopters all owned by the Australia Helicopter Traders. The other two helicopters are no longer in the country. Ian White and Andrew Hoare, the second defendant, are directors of Helicopter Service Australia. Together with Mr Yalo, they are directors of Helicopter Service Niugini.

5. Apparently the relationship between Messrs Yalo, White and Hoare turned sour around 2012/2013 with the plaintiff alleging that in contravention of the charter agreement and by fraud the helicopters were engaged in business in breach of the charter agreement resulting in income being diverted to the bank accounts of Australian Helicopter Traders and Helicopter Service Australia for the benefit of Messrs White and Hoare and those companies, and to the exclusion and detriment of Helicopter Service Niugini.

6. The plaintiff filed this proceeding claiming monies due to him as the executive director of and a shareholder in Helicopter Service Niugini. Mr Yalo is seeking:

(1) Unpaid salaries of K750,000;

(2) Unpaid Director’s fees of K360,000; and

(3) Unpaid Dividend payments.

7. At the time of the ex parte application the plaintiff presented evidence that the helicopters were already loaded on a ship en route to Lae for export out of the country. The plaintiff argued then that while he is owed a substantial amount of money by the first four defendants, both Australia Helicopter Traders and Helicopter Service Australia are unregistered foreign companies whose only assets in the country are the two helicopters. Mr Yalo contended that if the helicopters are allowed to leave the country that would make it difficult to satisfy any judgment in favour of the plaintiff. It was in those circumstances put to the Court that the ex parte application was upheld, mainly to maintain the status quo. The matter was then made returnable for inter partes hearing to determine whether or not the interim orders should continue.

8. After the grant of the ex parte interim orders, Australasian Jet Pty Ltd (Australasian Jet) was joined as the fifth defendant on the basis that it has an equitable interest in the subject helicopters, in that it is in the process of buying them from Australia Helicopter Traders pursuant to a contract of sale dated 2nd June 2016. The deposit for the sale has been paid while completion awaits the delivery of the helicopters to Australia.

Legal principles

9. The relevant legal principles for the grant of an interim injunction are well settled and that is that an applicant must show that:

(1) There are serious questions to be tried and that an arguable case exists;

(2) An undertaking as to damages has been given;

(3) Damages would not be an adequate remedy if the interim order is not granted; and

(4) The balance of convenience favours the granting of the interim order.

(See for example Chief Collector of Taxes v Bougainville Copper Ltd (2007) SC853)

Serious question to be tried

10. As to the first consideration of whether there is a serious question to be tried, the plaintiff must prove he has a serious and not a speculative case with a real possibility of ultimate success; Robinson v National Airlines Commission [1983] PNGLR 478.

11. If it is true that the plaintiff is owed salaries, director’s fees and dividends as Executive Director and shareholder of Helicopter Service Niugini, those monies are payable by that company which has not been named as a defendant in this proceeding nor is there any claim pleaded against Helicopter Service Niugini in the plaintiff’s Statement of Claim. I asked Mr Ketan of counsel for the plaintiff to address this issue, and while he conceded that his client’s claim should be against Helicopter Service Niugini he argued that Helicopter Service Niugini’s liability is “extended” to the first four defendants as a result of the fraudulent activities of the defendants. I had great difficulty understanding the basis for the submission and in the end I reject the submission as tenuous and misconceived. For that reason alone, I am satisfied there is no serious question to be tried, that is, no arguable case exists and the interim orders should discontinue. I will revert later to the issue of incorrect defendants.

Damages as adequate remedy

12. If I am wrong and there are serious questions to be tried, I next determine whether the plaintiff would be adequately compensated in damages. Interlocutory injunctive relief should be refused if damages would be an adequate remedy: Airlines of PNG v Air Niugini Ltd (2010) N4047 and PNG Deep Sea Fishing Ltd v Luke Critten (2010) SC1126. The Court is to consider whether damages would compensate the applicant should it be found that his legal rights have been infringed by the party he is seeking to enjoin: Employers Federation of Papua New Guinea v. Papua New Guinea Waterside Workers and Seaman’s Union and Arbitration Tribunal (1982) N393.

13. Mr Ketan argued that the defendants do not own any assets in this country, and therefore damages would not be an adequate remedy because the defendants may not be able to satisfy judgement in...